Many people strive to attain financial independence, and one of the most effective ways to do this is by paying off your mortgage earlier than expected. It may seem like an intimidating goal at first but there are simple steps you can take toward achieving it. Whether you set aside windfalls or lump sums for extra payments or refinance your loan – with dedication and commitment from yourself, attaining a debt-free home could be just around the corner!
1.) Refinance Your Mortgage
Paying off your mortgage earlier than expected is a dream come true for many homeowners. Refinancing – or renegotiating the loan terms of your existing mortgage – could be the best way to make that happen! Not only does it give you an opportunity to lower your interest rate, but also shortens up the loan term so you can save even more money in comparison with what was originally agreed upon. Ready to get started? Reach out and connect with a trusted mortgage broker who will help guide you through all available refinancing options as well as identify which one works most effectively for you!
2.) Make Extra Payments
Making more than one payment a month on your mortgage can help you pay it off much faster. All you need to do is tell your lender to apply the extra payments towards the principal of your loan and not just interest. By paying down the principal more quickly, you’ll save money in total by reducing how much interest will end up being charged overall!
3.) Round Up Your Payments
When it comes to paying bills, the majority of people stick with simply settling the amount due. While this is fine for some costs – such as electricity or your cell phone bill- those wanting to pay down their mortgage might be better off rounding up payments instead. For instance, if you owe $756 on your mortgage payment, round that number up and make a payment of $800; ask your lender to put any additional money towards loan principal and observe how rapidly you can reduce debt!
4.) Add a Dollar a Month
A dollar a month may sound insignificant, but it can make all the difference in paying off your mortgage faster. Take for example someone with a thirty-year fixed-interest loan of $150,000 at 6% interest; adding just one extra dollar to the regular payment each month can reduce payments by eight years! It’s as easy as starting with an additional $901 this month and then increasing it incrementally ($902 next month, etc.) throughout the life of your loan. Even if you don’t have set increases in income over time this strategy could still save you money on interest rates and help pay off your mortgage quicker.
5.) Use Windfalls Wisely
The holiday bonus you receive, your annual tax refund, and other financial windfalls can all be used to reduce the burden of your mortgage. This “found money” isn’t part of your monthly budget so there’s no need to worry whether paying more on the mortgage will leave enough for groceries; this cash won’t even be noticed! Applying it directly to what you owe is a great way to make an impact on reducing debt quickly.
6.) Make a Lump-Sum Payment
If you happen to receive a substantial inheritance or any other large lump sum, making a one-time payment may be the perfect way to use it wisely and take steps toward paying off your mortgage early. You are at liberty to make this kind of payment whenever you choose; however, if recasting is an option for your loan type – excluding FHA and VA loans – then taking advantage of that will give more palpable benefits in regards to savings over time. Prior to transferring that hefty amount into your mortgage balance, have a discussion with either your lender or broker about recasting options available for you.
7.) Earn Side Income Just for Your Mortgage
If you’re motivated and have a plan, a side hustle can help you pay off your mortgage early. Whether it’s crafting products or services to sell, driving for ride-share companies, or something else – if your main job covers all expenses – any additional money earned from the side gig could be allocated solely to the mortgage! On top of that bonus; if things go really well with this venture? Maybe it becomes what pays all of your bills one day!
8.) Get an Adjustable Rate Mortgage
Despite their misunderstood reputation, adjustable-rate mortgages can provide several advantages. For example, the initial low-interest-rate allows you to rapidly accumulate equity and allocate more funds toward principal repayment. An adjustable-rate mortgage might be a good fit for some borrowers depending on their income and unique situation since it means that the interest rate could go up or down over time. Speak with an experienced mortgage broker today if you would like to explore this option further!
Contact Sword Mortgage To Learn More
To pay off your mortgage early, you’ll need to make a few changes in your lifestyle and dedicate yourself to it. And at times, this may also require some financial sacrifice. However, the end result is worth it!
At Sword Mortgage, we believe that an informed customer is the best kind of customer. Therefore, our loan officers will take the time to fully explain your options and help you understand all aspects of your unique situation before making a decision. Call (770) 757-5750 to speak to a mortgage professional or get started on your loan application process today.
