How to pay off your mortgage early - Best Homes in Broward

Jun
12

How to pay off your mortgage early

So many people get into a mortgage and then decide that it is not what they want. Others opt for a 30 year mortgage so that the payments are lower. This make their budget more comfortable. With so many mortgage options out there, it's hard to believe that you can actually be mortgage free before you retire. Here are a few ideas as to how you can work on paying off your mortgage early and enjoy life more financially independent than you ever thought you could.

The first thing you need to do is look at your mortgage's fine print before you tackle the issue of early payoff. Some mortgages have what is called a Prepayment Penalty. This is a fancy term for telling you that your mortgage lender wants to make sure they get their money out of your loan. If you opt to pay off your mortgage early, they might have the right to charge you for part of the remaining fees or interest. They may actually be able to charge you for the interest you get out of paying by paying early. Or they might just charge you a one time set fee for paying early. Depending on the amount of the fee, it is usually still a good deal to get out from under the interest you will be paying for your mortgage if you can.

But what is the reality that you can actually pay off your mortgage early? High in most any case regardless of your income. Here are a few ways to get out from under your mortgage painlessly.

Pay a little more than your minimum house payment each month, even if it is just $20 a month. I have a girlfriend that pays $100 more per month than her minimum monthly payment by setting aside $25 a week and applying it to her mortgage at the end of the month. It will probably save her around 5 years of interest just by that little bit of extra payment each month.
Bi-weekly payments are one of my favorite ways to pay off your mortgage early. This is where you set up an automatic withdrawal of 1/2 of your monthly payment every 2 weeks. Most people get paid every 2 weeks anyway so this is a great option. This can save you years and THOUSANDS of dollars in interest because it essentially pays an extra house payment every year without you feeling the pinch.
Buy small at first but pay big. This means that you start out in a starter home but pay the same mortgage that you would have paid if you bought a bigger home to begin with. That way, you will pay more towards the principle in the home you currently own and will have more equity to invest in the home of your dreams later. This line of financing also gets you used to a larger payment than you have to have so that when you do buy that bigger home, your mortgage will not be such a shock.
For a season, make 2 payments. This is a stretch for most of the world as we tend to live on a budget that has more month than money at the end. But if you can do this for a short season, it is worth it. How do you do that? Easy. Some people love to swim, so for the summer, they take on a beach or pool job as a life guard on the weekends or at night for just the summer season. They use that money to go straight towards the mortgage and that saves them over a year's worth of interest each summer. How cool is it to get paid to do what yo love and then pay off your mortgage early in addition to that.

Paying off your mortgage early is not for everyone. I realize that. But if you can speed up the process in any way, why wouldn't you? Everyone assumes that you need to have a mortgage payment. Some people who make less than $40,000 a year have no mortgage payment simply because they worked hard to pay it off in the beginning. However, remember that most of America has a mortgage payment and you mus do all that you can to make it each month, no matter what your strategy is. That way you can stay in your home and not have to worry about loosing it.

Your debt to income ratio can affect your mortgage
What is the deal with subprime loans