3 Methods for Early Mortgage Payment

Mortgage payments each month are undoubtedly a necessary evil. In some situations, mortgages cannot be avoided, and the lengthy amortization period of 30 years seems excessive. You never stop daydreaming about the quickest ways to pay off the mortgage. The information in the next section would be helpful if you really wanted to pay off your mortgage quickly. You would learn some tips that are thought to be the quickest ways to pay off the mortgage. The total amount of interest that the borrower will have to pay over the many years of the amortization schedule frequently exceeds the initial principal sum!! Make your own inquiries using a mortgage calculator.

Therefore, paying off a mortgage quickly always spares the borrower from having to pay the astronomical amount of interest associated with a conventional long-term mortgage plan.

• Payments made every two weeks rather than once a month are a very popular practice. Your amortization schedule will be shortened by 6–8 years as a result of splitting your monthly payments into two weekly payments. However, you should check with your lender before choosing this option as some lenders charge an additional fee for splitting the monthly payment.
• Paying down the principal – When you first start making mortgage payments, the majority of your money is spent on interest rather than the principal. Early mortgage repayment is therefore challenging. Talk to your lender about always sending some extra money (whenever you have some) that is specifically marked as an “extra payment towards the principal” to ensure that it does not apply to your due interest. Depending on your convenience, you may pay it once a month (which is the most advantageous), bimonthly, quarterly, every six months, or even once a year. Because the mortgage interest is tax-deductible, you must pay particular attention to the impact it would have on your tax payments. It is always advisable to put the full amount of your tax refund toward the principal of your mortgage. Undoubtedly, this is a fantastic way to quickly reduce your loan.
• Payment increase – Increasing your monthly payments by a factor of 1/12th of your minimum payment is one of the simplest ways to pay off your mortgage more quickly. By adding just a little each month, you could cut your amortization schedule by at least eight years.
• Mortgage refinancing to a shorter term – When you refinance your mortgage term, say, from 30 years to 15 years, you not only reduce the amortization schedule, but you may also be able to take advantage of lower interest rates as shorter term mortgages are typically associated with a lower rate of interest. You might have to cover closing expenses, etc. and your monthly mortgage payments would also be higher but, in the end, you would be able to get rid of the mortgage early.