Pay Your Mortgage Off Faster With These Money-Smart Strategies

Pay Your Mortgage Off Faster With These Money-Smart StrategiesAs with any loan or line of credit, there are benefits to getting your mortgage paid down. You’ll pay less in interest, potentially saving thousands over the repayment period. Moreover, you’ll own your home outright that much quicker.

Let’s explore four money-smart strategies that will help you to pay your mortgage off faster.

Start With The Obvious And Increase Your Payments

It won’t come as a surprise that one of the easiest ways to get your mortgage paid off is to increase the amount you put towards your monthly payments. Most lenders will allow you to place any extra funds directly against the outstanding loan amount or “principal.” This is very efficient as it avoids having to commit any additional funds to interest.

One trick that many families use is to round the payment amount up to the nearest hundred-dollar figure. For example, if your mortgage payment is $652.32, you would pay $700 instead. This might be an easy burden on your wallet but still amounts to an extra seven percent of your payment.

Accelerate Your Payment Schedule

Another way to get your mortgage paid off as quickly as possible is to accelerate how frequently you make payments. For example, if you are currently making payments on a monthly basis, you can switch to bi-weekly payments instead. This means that instead of 12 large payments per year, you’re making 26 smaller payments. However, your interest will still compound on a monthly basis which means that over time you’ll end up paying less in interest. Not all mortgage products support this, so it is best to check with your mortgage professional to ensure it is an option open to you.

Dedicate Your Tax Refund To Your Mortgage

If you receive a tax refund or other large sum of money, consider using it to pay your mortgage down further. This is an excellent use for a spare block of cash as it gets you one step closer to owning your home, free and clear.

Refinance Your Mortgage To A Shorter Term

Finally, one last strategy is to look at a shorter term for your mortgage. For example, if you started with a 30-year amortization, you can refinance down to a 15-year loan instead. This will require having access to significantly more money to place against your payment, so be sure to carefully budget for this additional cost.

These are just four of the many ways that you can get your mortgage loan paid off faster. For more information or to inquire about a mortgage for your next home, contact us today. Our professional team is happy to share additional strategies that can have you owning your dream home in no time.

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3 Reasons to Hit the Accelerator on Your Mortgage Payments – If You Can Afford It

3 Reasons to Hit the Accelerator on Your Mortgage Payments If You Can Afford ItDoes the thought of repaying your mortgage for the next twenty-plus years leave you feeling a little down? Whether you’ve had your mortgage for weeks or years, accelerating your payments is an excellent option that can help get your mortgage fully paid off in a shorter time frame. Let’s explore three great reasons to accelerate your payments so that your mortgage debt is paid down faster.

You’ll Be Debt-Free That Much Faster

It may seem obvious, but it’s worth stating that you’ll be debt-free that much quicker if you accelerate your repayment schedule. Every extra payment you make against your mortgage debt builds the amount of equity you own in your home. So not only are you becoming more debt-free with each payment, but you’re also building your net worth. And while it’s true that you might only shave a year or two off of your 25-year mortgage period, being debt-free faster is still worth the effort.

You’ll Pay Less Interest

With most mortgages, any extra payments that you make will go straight towards your ‘principal’ balance. Getting the principal paid down faster means that you’ll end up paying less in interest than if you hadn’t. If you consider that every year you shave off of a 20-year amortization period is a full year of interest that you won’t have to pay, it adds up. Note that if you have an existing mortgage agreement, you’ll need to check the terms to determine the rules around extra principal payments.

You’ll Have More Financial Freedom

Finally, the faster you get your mortgage paid off, the more financial freedom you’ll have. The equity and credit you’ve built over time will also provide you with some options. You can invest in buying an investment property, or in taking out a line of credit to renovate and upgrade your current home. If the numbers make sense, you can also borrow against your home equity to invest in the financial markets. This will diversify your investment portfolio and expand your net worth.

As you can see, it’s well worth the financial investment to accelerate your mortgage repayment. If you can afford it and it won’t significantly lower your quality of life. If you have questions about a mortgage new or existing, contact our team of mortgage professionals. We’re happy to help.

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Finding Your Latte Factor: 3 Ways to Find the Money to Make Extra Mortgage Payments

Finding Your Latte Factor: 3 Ways to Find the Money to Make Extra Mortgage PaymentsIt’s not uncommon for a homeowner to want to pay more than the minimum monthly mortgage payment on their home. However, just because it can seem hard to come up with the funds on a monthly basis doesn’t mean it’s not possible to find the money for extra mortgage payments each year. If you’re wondering how you can pay down your mortgage debt much sooner with extra money, here are some tricks you may want to try.

Relinquish Your Refund

Many people look forward to tax time because it’s an opportunity to spend their refund on shopping, dining or a much-needed vacation. However, using your tax refund to pay down your debt can actually be a satisfying way to put more down on your mortgage and achieve something lasting from that extra bit of cash. While you may want to set some aside for an outing or a special treat, the amount remaining on your mortgage will seriously benefit from the extra payment.

Re-Tool Your Budget

If you’ve been successful at making your mortgage payments, it’s likely that you have a working budget that you stick to each month. But like any plan, a budget can change. If you haven’t done so in a while, it’s worth sitting down to re-calculate your monthly income and expenses. There’s a good chance that some expenses exist that you can pare down or get rid of entirely. While it may not make a significant difference in one month, small amounts will add up over time.

Plan A Yard Sale

It’s easy to acquire a lot of things that you don’t necessarily use, whether it’s technology or kitchenware or home decorations. Fortunately, planning a yard sale for your infrequently used items can be a great way to come up with a small fortune to pay off your mortgage sooner. Of course, you’ll need to be ready to haggle to get the prices you’re looking for. And don’t forget to get the locals involved and make it a neighborhood event for even more selling success.

It may seem nearly impossible to come up with the money to put more down on your mortgage, but using your tax refund and re-tooling your budget can easily add up to savings that make a difference! If you’re considering buying a new home in the future, contact one of our mortgage professionals for more information.

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The Dirty Truth About Discipline : Pros and Cons of Owning Your Home “Free and Clear”

It wasn’t long ago when one of the best benefits of owning your own home were those home equity lines of credit you could get.

In practice, this translated to a whole lot of fun for a whole lot of folks: new furniture and electronics, a pool, maybe even a new car or exotic vacation. And then … POP!

Since the housing market crashed we’ve heard about how many folks are underwater on their homes. But now, statistical and anecdotal evidence alike suggest that more and more Americans are pursuing an entirely different approach to home ownership: aspiring to own their homes “free and clear.”

The Pros and Cons of Owning Your Home “Free and Clear”

Just like every other financial decision, this one is highly personal and situational. But generally speaking, if owning your home free and clear sounds like a financial strategy that might fit in with your own big picture plans, you’ll first want to weigh some basic pros and cons.

Topping the list for most folks in the “Pro” category is peace of mind. Plain and simple, you don’t have to worry about a mortgage payment, and you know you’ll always have a roof over your head if, for example, you lose your job.

For a lot of folks, knowing they’re not paying their hard earned money to the bank in the form of interest is also a plus. But freeing yourself from a big mortgage payment also gives you more financial flexibility to do other things. You can take other chances, for example, like quitting your job.

Included among the cons are tax breaks like the mortgage interest deduction you’ll be missing (the higher your tax bracket, the more tax breaks like this can matter).

And with interest rates at historical lows, no one can argue that if you’ve got the self-discipline, time, and know-how, investing that money rather than paying off a low-interest home loan can make sense. But let’s be honest, very few folks actually have that sort of discipline, time and know-how.

Last, if you have to invest every last penny you have in order to own free and clear, you might be better off investing in several other places to diversify. You should also keep some cash handy for an emergency. Your bank’s not going to give you that money back if you’re in a bind!

The bottom line is that more and more folks decide the pros outweigh the cons. Studies are now showing that almost 30% of Americans own their home free and clear. That’s 21 million households! But is it the right decision for you?

Will I Be Able to Pay Off My Home?

Several factors have been found to predict who will or will not choose to own free and clear.

First and foremost is home values. There’s a direct correlation between how affordable homes are in a certain area, and people’s ability to get their mortgages paid off free and clear.

For example, one of the highest rates for owning free and clear in the entire country — almost 50% — is in McAllen or Hidalgo, Texas, where the average home value is in the range of $75,000. Contrast that to Washington DC, for example, where the average home value is closer to $400,000, and only around 8% of homeowners are able to pay off their mortgages.

Age Matters

A second big factor we’re seeing is borrower age. Folks in that 65 to 85 age bracket top the list for being mortgage-free.

Almost 40% of homeowners in this group own free and clear.

Reasons behind this include the fact that the longer you live somewhere, the more time you have to pay off the mortgage. Older folks historically have more money saved for down payments and to pay off their home loan.

Owning free and clear is also a priority for these folks as they near retirement, but we are seeing younger folks starting to own free and clear as well.

Credit Score Can be an Indicator

Last is credit score. Almost 45% of all folks who own free and clear have a credit score in the 800 to 900 range. This particular factor can be likened to the question, “which comes first, the chicken or the egg?”

Folks with the self-discipline to have a stellar credit score probably have the self-discipline to get their mortgage paid off.

And folks who manage to get their mortgage paid off generally wind up with a higher credit score. The point is, it’s good to be one of them!

How to Pay Off Your Home

If your goal is owning free and clear, any extra amount of money you have lying around can used to pay down your mortgage counts. In addition, if you can afford to make just a single extra payment each year, you can cut the time it will take to pay off your mortgage significantly. Check out an online mortgage calculator to see how quickly the dollars can melt away.

Another way to accomplish the same thing, if your bank allows, is to pay half your mortgage every other week. Additionally, if you haven’t already refinanced to take advantage of low rates, what are you waiting for?

And if you’re serious about owning free and clear, then get serious about a 15 year mortgage instead of a 30 year mortgage. You’ll benefit from paying less money toward interest, too.

Finally, check your household spending for other cost cuts that can be used to get that mortgage paid down! For example, can you have your real estate taxes reduced, or save money on homeowner’s insurance or utilities? Those savings can be used to pay down your mortgage.

Pay down Your Mortgage Faster by Eliminating These Five Unnecessary Household Expenses

Pay down Your Mortgage Faster by Eliminating These Five Unnecessary Household ExpensesThe monthly mortgage payment can be one of the most significant household expenditures for a family. However, while it can be a sizable amount, there are certain household things you may be able to eliminate that will help you put down more money and pay your mortgage off a little faster. If you’re interested in ways to save, here are some expenses you may want to consider cutting out.

Giving Up The Cable

Television is an important de-stressor for many people, but it can also be a considerable monthly expense that is often unnecessary. With borrowing materials available at the library and many videos available for streaming online, you can cut your cable cost and may be able to save more than $100 a month.

Coffee On The Go

It may not be a household expense, but the average person can rack up a lot of expenditures each month on caffeine alone. Instead of stopping at the local cafe for a quick fix, consider trying the office coffee or taking a thermos in the morning for savings that will add up by the week’s end.

Dinner On The Town

Going for dinner or getting take-out on the way home can be a great way to finish off a day, but it can also add up to huge monthly expenditures if you’re doing it frequently. While you shouldn’t cut out trying new restaurants altogether, ensure that it’s not something you’re indulging in all the time.

The Grocery Bill

You’ll be able to save a lot of money easily if you’re not buying lunches or dinners, but bargain shopping is still important when it comes to household staples. While this may not make a difference on each bill, it can add up to a considerable dent in your monthly payment overtime.

Saving On Your Smart Phone

Nowadays, most people have a smart phone and have exhausted their need for a landline, but phones can still be quite a money drain when it comes to extra data and an expensive plan. Instead of accepting your bill as is, talk to your provider about deals they can provide so you can save the difference.

The monthly mortgage payment can be a financial burden, but there are many simply ways to save through the year that will add up to big savings and a faster pay-off date. If you’re planning on putting your home on the market, you contact your trusted mortgage professional for more information.

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Pay down Your Mortgage Faster by Eliminating These Five Unnecessary Household Expenses

Pay down Your Mortgage Faster by Eliminating These Five Unnecessary Household ExpensesThe monthly mortgage payment can be one of the most significant household expenditures for a family. However, while it can be a sizable amount, there are certain household things you may be able to eliminate that will help you put down more money and pay your mortgage off a little faster. If you’re interested in ways to save, here are some expenses you may want to consider cutting out.

Giving Up The Cable

Television is an important de-stressor for many people, but it can also be a considerable monthly expense that is often unnecessary. With borrowing materials available at the library and many videos available for streaming online, you can cut your cable cost and may be able to save more than $100 a month.

Coffee On The Go

It may not be a household expense, but the average person can rack up a lot of expenditures each month on caffeine alone. Instead of stopping at the local cafe for a quick fix, consider trying the office coffee or taking a thermos in the morning for savings that will add up by the week’s end.

Dinner On The Town

Going for dinner or getting take-out on the way home can be a great way to finish off a day, but it can also add up to huge monthly expenditures if you’re doing it frequently. While you shouldn’t cut out trying new restaurants altogether, ensure that it’s not something you’re indulging in all the time.

The Grocery Bill

You’ll be able to save a lot of money easily if you’re not buying lunches or dinners, but bargain shopping is still important when it comes to household staples. While this may not make a difference on each bill, it can add up to a considerable dent in your monthly payment overtime.

Saving On Your Smart Phone

Nowadays, most people have a smart phone and have exhausted their need for a landline, but phones can still be quite a money drain when it comes to extra data and an expensive plan. Instead of accepting your bill as is, talk to your provider about deals they can provide so you can save the difference.

The monthly mortgage payment can be a financial burden, but there are many simply ways to save through the year that will add up to big savings and a faster pay-off date. If you’re planning on putting your home on the market, you contact your trusted mortgage professional for more information.

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