3 Easy Ways to Get Rid of Your Mortgage Faster

3 Easy Ways to Pay off Your Mortgage Faster!

Does the idea of having you mortgage for 30 years and paying thousands and thousands of dollars in interest sound fun?? Of course not! That's why I am going to show you 3 easy ways to get rid of your mortgage faster and save you thousands of dollars!

1. Make Higher Payments

Before you exit out of this article because you're thinking that you don't have the money to make higher payments just hear me out. Adding even a 100 dollars to each payment can significantly help you out! It will slowly add up which reduce the interest and best of all will take years off your mortgage. The shorter your mortgage lasts the less interest you have to pay! This will also create a safety net in case something happens; having a safety net is never bad. If you can't add any money to your monthly payments don't worry the next tip is another great way to save money, personally it's my favorite way to save!

2. Make a One Time Payment.

It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift.  You could apply this money toward your loan's principal, resulting in significant savings and a shorter loan period.

Example:

With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.

If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That's a savings of $22,832.23 in interest.

3. Refinance

Guess what?? Rates change all the time. That means if you keep an eye on mortgage rates you could really save some money on your monthly payments. Best of all it could result in lowering your mortgage length! Give your mortgage broker a call and tell him that you're interested in refinancing if he/she can get you a better rate! She/he will be happy to do that for you because it brings them business too!!