Simple Tricks to Paying Off Your Mortgage that you just might not have thought about…
A mortgage is generally the largest debt that a person faces in life. A large part of that expense is due to the interest rate that you, as the borrower obtain when you lock your initial loan rate. Most homeowners would gladly reduce that debt if the opportunity presented itself. Some people may forget or do not realize that the key to reducing their mortgage debt lies in reducing the amount of interest that they pay on their mortgage.
Paying Extra Principal Payments
Mortgage lenders allow all borrowers to make additional principal payments. It can be any amount added to your normal PITI payment. (principal, interest, taxes, and insurance). If all of these are added to your payment.
Making extra principal payments can help with paying off your mortgage months or even years in advance, the interest that is saved can be alarming. You are actually saving thousands of dollars depending upon how much principal you pay. In addition, extra principal payments will then lessen the overall interest you will pay for the mortgage term.
If you can pay $100, the principal will go down more quickly of course than if you paid $25.00. However, you are saving interest regardless of how low the principal deduction is. You can even pay a lump sum for instance when you get a tax refund, a bonus, or any other amount.
So What Is The Major Simply Tricks To Paying Off Your Mortgage Early
The trick, of course, comes in figuring out a way to have money available, and sufficient to do this. It is developing a mindset that you want to take down your major debt as soon as possible.
For individuals who live on a tight budget, it is not so easy. That is why when obtaining a mortgage loan and starting to budget with a new home, you consider paying off other debts that are not a necessity.
These efforts take financial discipline and a mindset of being debt-free at some point. It must be a priority, and it must be consistent, however, it can be accomplished.
You Can Make Necessary Changes To Make It …easier to apply our Simply Tricks To Paying Off Your Mortgage…
- Do the budget- it will help you stay focused and disciplined.
- Determine how much you want to pay on your mortgage principal each month.
- Decide what you are overspending on in the first place, and put it to the principal of your mortgage.
- Stop feeling deprived, even if you are slightly deprived, it is better now than when you are 60.
- Stop overspending on playthings.
- If you are overspending to impress other people, you are digging your own grave financially. People are actually not impressed and would respect you much more for being a conservative spender. No, they will not tell you that.
Should You Pay Off Your Mortgage Prior to Retirement?
Simple Tricks and Methods to Consider Paying More On Your Mortgage:
- If you are making a 30-year term payment and can afford a 15-year term payment – very smart idea to do this-use the calculator to the right to get your 15-year payment or your lending will tell you.** calculate your now balance with the rate on the 15-year term, and make that payment each month.
- Pay payments ahead. Meaning you can pay two mortgage payments in the months if it is feasible.
- Your yearly income tax refunds (at least some) can be applied to the principal.
- When you pay off another debt (if applicable), apply that amount of money to pay down the mortgage principal.
- Apply your bonus income to your mortgage – save some – pay some on principal reduction.
- Sell anything that is not beneficial to you and apply it to any debt that would help you pay more on your mortgage principal. An old go-cart you are not using. Sell any item that you own and is not in use, with a value, and can be bought, or sold for currency.
- Plan your vacation for the scenery view instead of flying to your destination.
- Live below your means, plan, save, and pay off your mortgage early.
There is one very important point to remember about your financial status. Take nothing for granted as we now know for sure since the pandemic. That includes your job status, saving status, your ability to borrow money, or the availability of money from any source. Life can change very quickly, it is better to be wise today than be regretful tomorrow.
This post has been updated.
[newsletter_form type=”minimal”]
