For some, attempting to pay off your mortgage early may seem like a pipe dream. Though like with most things, every effort to make it happen gets you closer to reaching your goal. On our blog today: tips to pay off your mortgage early while reducing costs! Before considering any of the tips below, always check with your mortgage consultant to see which methods are a feasible option for you.
The first tip for reducing the length and cost of your mortgage is to consider refinancing to a shorter term or better rate. While initially the short term costs of refinancing may be pricey, in the long run it may be able to allow you to pay off your mortgage up to ten years sooner than expected while saving money on interest costs.
The second option is to aim pay a little more each month. This may allow you to pay off your mortgage sooner while not having to budget as much up front. For those on a tighter budget, this may be the best option as even setting aside $20 a month can shave off years of payments and reduce the amount you’re spending on interest costs, making the home-packed lunches to work worth it.
Some mortgage companies may have a prepayment penalty fee, so it is very important to reach out to your loan officer before deciding on doing so. If this is the case, making one extra mortgage payment at the end of each year may be a great option for you. Not only will it reduce the longevity of your payments, but it will also lower interest costs. This can be done by setting aside a small amount each month as opposed to coming up with a lump sum at the end of each year. Talk to your mortgage consultant today if considering one of these options to pay off your mortgage early!