If you’ve decided you want to pay off your mortgage sooner than later, here are some ways to pay off your mortgage early.
Refinance with a Shorter-Term Mortgage
Pay off a mortgage faster by refinancing to a 15-year mortgage. Shorter-term mortgages typically have lower interest rates than longer-term mortgages. The sooner you can pay down on the principal of the home, the quicker the interest figures will drop.
Make an Extra Mortgage Payment
If you save a twelfth of a payment every month and then make an extra payment at the end of the year, you’ll be able to pay off a 30-year mortgage almost three years early. This method also gives you the flexibility to use the extra savings for any unexpected expenses that come up.
Pay Using any Bonus Money You Receive
If you receive an unexpected windfall of cash or a sizable tax return, consider applying that money toward your mortgage. This can be extremely cost efficient in the long run, as you will save by paying less interest over time. This can definitely help pay off your mortgage early.
Make Extra Principal Payments
Most mortgage lenders will allow you to make an extra payment and mark it “principal only.” Paying down on the principal can save you quite a bit in interest and will pay off the loan quicker as a result. Contact your lender to see if this is an option you can take advantage of.
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