Although getting a mortgage is exciting—as it helps you become a homeowner—a mortgage is, in fact, a lot of debt. So if you have a mortgage, your goal should be to get rid of it as quickly as possible.
Here are 4 Ways to Pay Off Your Mortgage Faster!
1. Accelerate your payments
Changing from monthly payments to accelerated bi-weekly payments is one of the easiest ways you can make a difference to your mortgage’s bottom line. Most people don’t even notice the difference.
A traditional mortgage splits the amount owing to 12 equal monthly payments. Accelerated biweekly is simply taking a regular monthly payment and dividing it in two, but instead of making 24 payments, you make 26. The extra two payments really accelerate the pay down of your mortgage.
2. Increase your regular mortgage payments
Chances are you can increase your regular mortgage payment by 10–25%. This is a great option if you have some extra cash flow to spend in your budget. This money will go directly towards paying down the principal amount owing on your mortgage and isn’t a prepayment of interest.
3. Make a lump sum payment
Depending on your lender and your mortgage product, you should be able to put down anywhere from 10–25% of the original mortgage balance. Some lenders are particular about when you can make these payments; however, if you haven’t taken advantage of a lump sum payment yet this year, you should be eligible.
4. Review your options regularly
As your mortgage payments are withdrawn from your account on a set schedule, it’s easy to put your mortgage payments on auto-pilot, especially if you have opted for a longer term. This is why an annual review is a good idea; there may be opportunities to refinance and lower your interest rate.
Reviewing your mortgage annually makes you conscious about making decisions regarding your mortgage and ensures you always have the best mortgage for you! If you’re interested to learn more about the 4 Ways to Pay Off Your Mortgage Faster, contact us today to see how you can pay off your mortgage sooner.