If you resorted to taking out a bank loan in order to afford to buy your house, do not despair. The vast majority of all homeowners could only get through the process thanks to a mortgage, and it’s definitely nothing to be ashamed about. But it is quite the expense to deal with every single month. And the most frustrating part is that for the first several years, or even as much as a decade of time you are making payments, you are simply contributing to the accrued interest. That’s why so many mortgage holders look for any possible way to pay off their mortgage before the fifteen or thirty-year term is complete. If you’d like to make that a goal, here are five of the top tips for paying off your home mortgage early.
First of all, forget your mortgage for a little while and focus on paying off the rest of your debt. Regardless of how large your monthly payment on that bank loan is, it’s pretty much a guarantee that if you have credit card debt you’re paying more in interest there than on your mortgage. You’ll have to contribute more to your monthly mortgage payments in order to get rid of them early, but you won’t be able to do that if you’re carrying around credit card debt. So continue making your mortgage payments while aggressively paying off those cards. Once that debt is gone you’ll be ready to focus on the mortgage.
Next, figure out how your payment is currently being divided between paying down the interest and paying off the principal. You’ll have to increase your payments regardless, but you want to be smart about it. Once you know the threshold, make sure you are then paying off at least some of the actual principal due on the loan each and every month. This will get things going much more quickly.
Another great option is to make two monthly payments. Split things up, and note on your payment how you want them divided. Make your regular monthly payment that goes to interest, and then make a second monthly payment, noting that you want it to go strictly to principal repayment. Since the term is based on you making twelve payments a year, by doubling them up you will guarantee you get through paying off your debt much quicker.
So how do you get the extra money to make these additional payments? You might want to consider getting a second job. Although you’re probably already busy, you might be able to find fifteen or twenty hours a week you can contribute to earning some extra money. If not, do you have a hobby that you can possibly monetize? You’re going to have to bring in some extra income, unless you feel like going out to friends or family and asking for a loan with no interest. But that causes all sorts of other problems.
Finally, consider selling off some assets. Now is the time to look through your life and decide how much you really need to hang on to the stuff around you. You might be able to cut down on expenses by dropping from two cars down to one. That will save you money each and every month, while putting a big chunk of cash in your pocket for a lump payment. You might also want to consider holding some yard sales to rid yourself of clutter and stock up a bit of cash to make an extra payment or two. Any bit helps when you’re working hard to pay off that mortgage early.