If you own a home, congratulations. You have achieved the American dream. The trouble with this is that sometimes paying off that housing loan seems like it will take forever.
The truth is, however, it doesn’t have to. If you play your housing loan cards right, you can be the sole owner of your home in about half the time. This calls for several strategies, from multiple payments to refinance your housing loans with Dollarback Mortgage. The fastest way to pay off a mortgage loan is with a combination of the strategies outlined below.
Make Biweekly Payments
Every month split your mortgage payment in half and send in a payment every two weeks. At the end of the year, you will have made 13 payments. At the end of a loan, this will equal shaving four to six years off your mortgage.
Budget for an Extra Payment
Paying more than what you signed on for sounds like a huge step, but with some proper budgeting, it can be done. If you get a bonus or a tax refund, it can be done with that too. What better way of spending that money than to buy yourself some freedom?
Refinancing your home can lower the interest rate and result in significant savings. A homeowner can also refinance to achieve a shorter loan period to eliminate the debt sooner.
Send More for the Principal Each Month
If you can’t afford to send an extra payment in a year, try sending an additional amount every month. It would be best to contact your lender to make sure you know how to do this, but in most cases, they will welcome it.
Recasting Your Mortgage
If you receive a windfall and want to apply this towards your mortgage, many lenders will consider recasting your loan. With the application of this money, you can keep the term the same while reducing the amount of the monthly payment.
Use an Adjustable Rate Mortgage
Thanks to the housing bust of 2008, adjustable-rate mortgages have earned a black eye, but there are still times when they are an excellent tool to pay off a housing loan early. This is especially true if the loan is extended to someone who is financially stable, which was often not the case during the housing bust.
Take a Flexible Term Mortgage
Most loan periods are for 15 or 30 years, but getting a shorter amortization period is also possible. Talk about it with your lender, and if you can handle it, you will buy yourself more
Paying off a mortgage early is an excellent idea if your goal is to lessen your financial burden. On the other hand, it must be balanced with other financial obligations you might have. Before
you pay down your mortgage, you should also make sure that you contribute adequately to your retirement funds such as a 401(k) account or IRA. There should also be an emergency fund built up before you consider paying down your mortgage. Just as is the case with other things, it’s all a matter of priorities. What it all comes down to is if paying off your mortgage to buy yourself some financial freedom is your goal, it can be done, and you don’t have to sell your soul to do it.