The length of your mortgage can go to as long as how you want it to be. Regardless of the payment term you are on, the more you delay the longer it will last. This is because you are the only person who has control over the amount of money you send to the lender. Listed below are a couple of strategies that will help pay off your mortgage in a much quicker way and without having to go through refinancing. These are ideal for those who wish to remain stress-free as paying the mortgage can be a stressful situation especially if there is already so much going on in one’s life.
You Have Control
Okay, so now you know you are in control, you need to go about setting a goal so you can pay off your mortgage fast. Firstly, how quick do you want to pay off your mortgage? What is the date you are paid? Once you are aware of the dates, you can use ReadyForZero, where you will be able to keep track on when you will be able to pay off your mortgage. This tool can give you outcomes with the options (listed below), which allow you to distinguish your specific payment date. Read on and find how you can pay off your mortgage fast.
Using the Most Capable Way, Send Extra Payments
The date that was set using the tool will allow you to send in extra payments. If you are not certain where you will get that money from, then you may want to use a budgeting spreadsheet, which will help you track your monthly expenses, ensuring there is enough left to help pay off your mortgage. One thing you need to find out is the way your mortgagee accepts extra payments. Maybe you need to send these separately, or maybe they can be sent with your current payments. You will not know, until you do not ask. Maybe the lender automatically takes off the extra payment off the interest that has grown, or the primary amount of the loan. In order to discuss this with your lender, you can just drop them an email or a phone call where you will be able to get a quick response to your questions.
Fix Your Payments to Twice a Week
Mortgage lenders may have the option of accepting payments twice a week. With the ones who do not, you may negotiate this with them. If you send two payments a week to pay off your mortgage, you will be making 26 half payments a year, as there are 52 weeks in a year.
This does not mean just because you pay twice a week once, you have to keep doing it. It is up to you whether you want to imply the paying bi-weekly rule, but you need to ensure you are paying at least once. If you pay twice a week one week, then the income that is brought to the family the following week can be enjoyed, as you will have the peace of mind you have paid double the amount the previous week. It is not a must, but something you may like to consider.
Eradicate Your Escrow Account
If less than twenty percent goes to your home purchase, chances are you have an escrow account. What this means is the mortgagee has to charge you enough money throughout the year, which is divided over your payments. This pays your property taxes and your mortgage insurance for an account they are holding for you. If you choose to get rid of the escrow account, you can save the money for yourself, which may even be used to top off your payments.
Shop Around for Homeowner’s Insurance
Whether it is through your own account or through an escrow account, annually you need to put aside some money for the yearly homeowners insurance cost. If you are able to decrease the cost of your homeowners insurance, then that makes it easy for you to send extra money towards the real principle. Just make sure you shop around.
Stay on the Lookout for Prepayment Consequences
Okay, so you want to pay off your mortgage faster, at the same time you also need to look for any obstacles you may come across. Mortgagees do not like to take your money early, because overall they will be earning less interest. Just to make up for this, some lenders may include penalty sections in your mortgage. Before doing anything, it is important you discuss the contract with the lender until you fully understand that there are no penalties involved. You can review your contract several times until the time you are certain that there are no penalties involved. Only when you are sure is when you should take the step and go about it.