It’s no secret that mortgage payments are a huge financial burden for many people. In this blog post, we will discuss how you can pay off your mortgage early through budgeting and careful planning. Being mortgage free is a huge accomplishment, and with these tips, it’s within reach!
1. Make it automatic online.
One way to make mortgage freedom a reality is to make your mortgage payment automatically each month from your checking account. This will ensure that you never miss a mortgage payment, and it can also help you to budget better. You can typically set up this automatic payment online through your mortgage company’s website.
2. Refine your budget
Start by taking a close look at your current budget. Are there any areas where you can cut back in order to have more money to put towards your mortgage each month? Once you’ve refined your budget, you’ll be able to better see how much extra you can realistically afford to pay towards your mortgage each month.
Paying even a little bit extra each month can make a big difference. For example, let’s say you have a $100,000 mortgage with a interest rate of four percent. If you make the minimum payments each month, it will take you just over 30 years to pay off the mortgage. However, if you add an extra $100 to your monthly payment, you would pay off the mortgage in less than 26 years. And if you can afford to add even more to your monthly mortgage payment, you’ll be mortgage free even sooner.
3. Refinance to a 15 year mortgage plus extra
Another option is to look into refinancing your mortgage. If you currently have a 30 year mortgage, could you refinance to a 15 year mortgage? Or even better, a 15 year mortgage plus an extra payment each month. This will help pay down the principal of your loan faster and save you money in interest payments.
4. Pay an extra per month towards your mortgage.
Another way to make headway on your mortgage is to pay a little extra each month. Even an extra $500 per month can make a big difference over the life of your loan. If you’re able to swing it, consider making bi-weekly mortgage payments instead of monthly payments. This will help you save on interest and pay off your mortgage even faster.
5. Bi-weekly payments plus $200 extra per month.
One way is to make bi-weekly payments instead of monthly. This will accelerate your mortgage payoff by making an extra payment each year. Another method is to budget and include an extra $200 (or more) per month towards your mortgage principal. By doing this, you can shave years off your mortgage and save a ton of money in interest payments.
Paying off your mortgage early is a great way to save money and become debt free. By following these budgeting and planning tips, you can make mortgage freedom a reality. What are you waiting for? Start budgeting today!