In my previous blog I said one of your goals when buying a house is not to use your home as a bank. Your goal should be to pay it off. Your goal should to pay it off before you retire.
So here are a few tips on how to pay off your house.
1. Don't take out a home equity loan. Save the money to improve your house.
2. Don't refinance your home unless it is over a 1% reduction in rate. If you haven't refinanced in over 4 or 5 years it most likely isn't in your best interest even if you are reducing your interest rate by over 1%. If you refinance after 4-5 years into a loan you most likely will be paying too much interest all over again. You don't want to reset your mortgage to 30 years. If you can refinance to a shorter term then that is a good idea.
3. Add extra money to your mortgage when ever possible. Try doing a bi-weekly mortgage payment plan on your own. Pay down the mortgage when ever you can.
If you pay off your mortgage early you will be a little better off financially. You will be able to enjoy your senior years. You may have extra money when you need it most.
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