When you buy a home, paying off your mortgage seems like something that will not happen until some point far into the future. Whether you know this or not, paying it off early means that you will have the opportunity to save a great deal of money. Here are 4 tips that will help you get rid of your mortgage responsibilities sooner rather than later.
- Use Your Bonuses On The Mortgage
Yearly bonuses from work are great, but they are even better if you do something really useful with them, like applying them to your mortgage. Depending on the job you have, a bonus can be thousands of dollars. Instead of blowing it on something trivial, send it to your mortgage company and speed up your pay-off time.
- Invest Your Tax Refunds
When many people get their yearly tax refunds, they use them on things like new clothes and trips. While there is nothing wrong with having a good time, there is something better that can be done with these funds. Instead of spending all of this extra money on things that will not last forever, take at least half of what you receive and send it in with your typical monthly payment.
- Refinance Your Mortgage
Even after you have signed up for a mortgage with a lengthy term, you can double back and refinance later. This will give you the chance to shorten the term and save a ton of money on all of those interest costs. The downside is the fact that your monthly payments are likely to be higher, but that is a small price to pay since it means saving more in the long run and reducing your term by a decade or more.
- Pay Extra
Yes. It really is that simple. Every time you get paid, look at the amount of expendable cash you have available and use some of it to pay extra on your mortgage. A little will go a long way, especially if you are doing this every pay period. This might mean that you have less available for things like morning coffee and films on the weekend, but your mortgage will be paid off much sooner.
One thing that many people dread when buying a home is paying a mortgage for decades. Use these tips to pay off the loan early and that is one less financial hurdle you will have to leap over each month.