To date, there are more than 20 million Americans who own their homes outright. There are those who opted to pay their homes in cash, whilst other homeowners decided to pay huge chunks of their paycheck to pay their debt completely in just a few years.
Despite this, 75% of homeowners still owe lenders for money for their homes. The common goal among two-thirds of American homeowners is to pay off their debt as quickly as possible. If you dream is to get rid of your mortgage fast, here are some tips that you can follow to make this a reality (you can also check out rentnrank.com):
- Make extra payments
Do not forget to pay more than the minimum allowable repayment on your mortgage. Bear in mind that every single time you make extra payment on your loan, the addition money you put in goes directly to your principal. In this way, you lower down the principal at a faster rate, while ensuring that your interest rate goes down as well.
For instance, if you have a $220,000 house lone payable in 30 years at an interest of 4%:
- If you make extra payments each quarter, you generate up to $65,000 savings and shorten the term of the loan down to 11 years.
- You may also try to divide your payment by 12 and then add that amount to each monthly payment. You may also choose to pay half of your mortgage payment every two weeks. In this way, you will be able to shave up to four years off your home loan.
- Make sure to round up your monthly payments at least a few extra dollars a month. Small extra payments truly go a long way!
- If you get a raise or a bonus, why not make use of the extra money towards reducing your debt.
Always make sure to contact your mortgage company before making extra payments to ensure that the excess of the payments you make go directly to the principal.
This can be a very huge step for you and the family, but if you are firm to getting rid of your mortgage, make sure to consider selling your larger home. Instead get a smaller, less expensive home so you don’t have to worry about repayment in the future.
With the profits from selling your larger home, you will have the financial capacity to pay off your original mortgage. Even if you need to purchase a new home, you will only need to pay smaller amounts for your second mortgage.
- Seek the assistance of a pro when finding a new home
Make sure to consult a professional real estate to make sure you find a home that fits your needs and budget. Although you will need to pay for their services, they are guaranteed to find you the perfect home according to your specifications while saving you time and money in the long term.