Everyone dreams of buying a home. However, taking on a massive debt has some negative implications such as preventing you from taking early retirement, taking your dream vacation, or sending your children to college. You might feel like you are always in debt when you have a three-decade mortgage. Like other debts, it is advisable to pay off your mortgage as soon as possible so that you take off the burden.
Fortunately, you choose an effective way to reduce the time of paying off a house. The best part is that these strategies do not require spending a lot more money, so you do not have to make drastic changes in your life. As such, you can still pay off your mortgage faster than before and still keep up with the other financial needs. It may sound like an uphill battle, but you can win if you follow these suggestions to pay off your mortgage within ten years:
Make biweekly payments
One of the best ways to pay off your mortgage within a short time is splitting the amount you make monthly in half and pay it in every two weeks. You will pay off the debt within a short time because you will have made 13 monthly payments by the end of the year. The trick can shave five to six years off the usual three-decade loan. Some companies allow people to have a plan for the biweekly payments, while others do not require any plan. However, you need to confirm with your lender if biweekly payments are accepted and how to process them.
Refinance to a short-term loan
You can consider refinancing your mortgage to reduce the payment period. You can refinance your 30-year mortgage to a ten or 15-year loan. Chances are that the monthly payments will be higher than the usual, but you will pay off the mortgage within a short time. Besides, short-term mortgages have lower mortgage rates than three-decade mortgages. You should search around before refinancing so that you ensure that you get a lower mortgage rate in Salt Lake City.
Make extra principal payments
Most mortgage lenders allow borrowers to make additional payments when paying their monthly fees and mark them as principal. That means that the extra payment pays down the principal amount as opposed to both the interest and principal. What most people do not know is that paying down even a little additional amount to the principal amount early on in mortgage not only reduces the payment period significantly but also saves significant amounts in interest charges. As such, you should plan on paying a little extra to your mortgage company on a monthly basis as an additional principal amount.
You now have a few tricks of paying off your mortgage faster than expected. You can combine these suggestions to increase your chances of paying off the debt in half the time. It might take longer because a mortgage balance is a vast amount that cannot be paid overnight. Fortunately, you can pay it off when you focus on the goal and avoid distractions.