Interested in paying off your mortgage quickly? Does a 30-year loan sound like a ridiculous amount of time to be making payments on your home? If so, join the club. Another unfortunate detail about that long of a loan is that you will have wasted tens of thousands of dollars that only went straight toward the interest. That’s hard-earned money that nobody can afford to lose!
That’s why paying off your mortgage quickly is something you and your household should strongly be considering. I’d be more than happy to help you out by sharing a few things I’ve learned along the way. These are several of the benefits along with tips on how to pay off your mortgage quickly.
Benefits of Paying Off Your Mortgage Faster
Just like with every other financial decision that you make, there are pros and cons when it comes to paying off your mortgage faster. But there’s a good chance that paying off your loan quicker is the best route that you can take. Here’s a brief glimpse at what some of the benefits are for you when it comes to paying off your mortgage quickly.
- You’ll spare yourself from wasting thousands of dollars that only is going toward interest
- Short-term debts (such as credit cards) will be a lot easier to pay off without having to make a mortgage payment every month
- You’ll also have the peace of mind that comes with owning your own home outright
Earn Side Income
One of the most obvious ways to pay off your mortgage faster is by bringing in additional income. This doesn’t necessarily mean that you have to go out and get a second job. Although, that can definitely help too. Start brainstorming about the skills or hobbies that you have. See if there’s any way for you to monetize them. Freelance writing, tutoring, and selling handmade crafts. All of these are potential options for earning extra income that can be put toward paying off your mortgage more quicker.
Adjust Your Budget
It’s time to take a good hard look at your budget and see where adjustments can be made. Are there any expenses that can be cut back on? Can you switch to a less expensive cell phone plan or cut cable services? Or perhaps it’s time to downsize from your gas-guzzling SUV to a more economical vehicle for your family? Every little bit helps when it comes to paying off that mortgage.
Make Additional Payments for Paying Off Your Mortgage Quickly
To really kick things into high gear, try making additional payments toward your loan on top of what you’re already putting toward it each month. Make sure to specify that the extra payment is for the principal only. Otherwise, it may just go toward interest instead. It’s also a good idea to make additional payments as often as possible. Even if it’s just an extra $20 here and there. Rather than waiting until you have enough saved up to make one big lump sum payment every few months.
Pay Half Your Mortgage Every Two Weeks
Making one mortgage payment monthly will equal 12 payments at the end of the year. But if you were to make half a mortgage payment every two weeks for 52 weeks, you would have made a total of 26 payments. That comes out to an extra mortgage payment that you’ve paid off without causing too much burden on your bank account.
Add any Extra Funds that You Can Spare
If you can afford to add an extra $50 or $100 to your regular payment consistently every month, every little bit will have a huge impact later on down the road. You’ll be putting less money towards interest and more towards the principal, helping you pay off your mortgage much quicker. So the next time you get a bonus from work or any extra cash that was unexpected, instead of blowing it, put it towards paying off your mortgage.
Give the Dollar-a-Month Strategy a Try
Increasing your monthly payment by as little as $1 extra every month may not sound like you’ll make any significant headway, but over the course of the loan, it can shave off months or even years off your payments. It may be a small increase, but hey, every little bit helps!
Put Windfalls Toward Your Principal
Any unexpected large chunk of money that comes your way – whether it’s a tax refund, inheritance money, or winning the lottery (hey, a girl can dream!) – put it towards your principal instead of letting it get swallowed up by interest. This can also help you take several years off the life of a loan.
Consistently Re-Evaluate Your Budget
Your financial situation is constantly changing and evolving – so should your budget for paying off your mortgage. Consistently reevaluate how much extra you can afford to pay towards your mortgage, and adjust accordingly. This will ensure that you’re consistently making strides toward paying off your mortgage quickly and efficiently.
Refinance for a Lower Interest Rate
Starting over on your mortgage payment may sound like a crazy thing to do, but you could end up paying a lot less for your home over time by choosing to refinance. This is especially true if your current interest rate is much higher than what is being offered to you. Chances are, your monthly payment will be reduced, but if you continue to pay the same amount as you were before, you’ll be able to pay off your home more quickly. Just make sure you weigh the pros and cons of refinancing before making any major decisions about your mortgage.
More Budgeting Tips
- Keep Your House Warm on a Budget
- How to Homestead on a Tight Budget
- The Importance of Being Debt Free and How to Do It
- 15 Ways to Save Your Grocery Budget
Lastly, Don’t Give Up!
Paying off your mortgage may feel like an overwhelming task at times, especially when things are tight, but don’t give up! Keep chipping away at those payments, and in no time you’ll be mortgage-free and living your best life. Stay motivated and focused, and you’ll achieve your goal before you know it. Good luck! Do you plan on using these tips for paying off your mortgage quickly?