Ways to pay off your mortgage early
If you are interested in pay off the mortgage early, you will find many experts advising you to do the same. All the strategies work, but you will find out various ways of paying down your mortgage which is faster and safer than others.
Compare the ways to pay off your mortgage early.
If you want to see a supernatural occurrence, start playing with a Mortgage Calculator and see how it will add a little amount to your principal and can easily shorten the length of your loan.
If you will compensate for a small principal amount, then you get a bonus. The lower your principal amount gets, the more payment from then is applied to the principal as very less goes cover the interest.
When you pay the extra amount, make sure that the extra cash is applied to the principal amount; you need not keep it aside for the next payment. Whenever you make the extra payment, read your contract carefully and make sure that you need not have to pay Prepayment Penalties.
Refinance to a shorter-term loan
You can easily refinance into a mortgage for 10, 15, or 20 years, but the most common is 15 years Mortgage. Your payment will be higher on 15- year loan but as high you think especially they often offer you cheap interest rates.
The advantage of a 15-year loan is that you are faithful to the higher payment. You do not need to feel hesitant about whether you can afford to pay extra this month or not.
Switch to bi-weekly payments
Bi-weekly payment takes the advantages that there are 52 weeks in the year and 12 months. If you pay a regular payment each week, you will make half payments at the end of the year.
You can use a bi-weekly calculator. The extra annual payment can cut about six years off a 30-year mortgage. You have to check whether your bank will set up a biweekly payment plan. Some banks set an extra payment until the end of the year.
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