Paying off your mortgage early may feel impossible at times. Like most things, it can be achieved through any and every effort to make it happen, no matter how big or small. On PMG’s blog today: tips for paying off your mortgage early while reducing costs. Prior to acting on any of the tips below, always consult with your mortgage consultant first to see which methods are a feasible option for you.
In order to reduce the length and cost of your mortgage, you should consider refinancing. A refinance could be for a shorter term or better rate; either method will end up reducing long term expenses and the length of your mortgage payments. Short term costs of refinancing can initially be pricey, but in the long run it will allow you to pay off your mortgage up to ten years sooner than expected (depending on your mortgage) while saving a great deal of money on interest costs.
An alternative to refinancing, aiming to pay a little more each month is a great option for those who may be on a tighter budget. It allows you to pay off your mortgage sooner, while not having to budget so tightly up front. Setting aside even just $20 a month can reduce the length that you will be making payments, while simultaneously reducing interest costs.
As prepayment penalties can be a factor in this process, it may be an option to make one extra mortgage payment at the end of each year. Not only will doing so significantly reduce the longevity of your payments, it will also lower interest costs. Coming up with a lump sum at the end of each year seems overly ambitious, so setting aside small amounts each month may allow you to reach your goal of an additional end of the year mortgage payment. Just consider it as your 13th month payment! Talk to your mortgage consultant today to achieve paying off your mortgage early.