You decided to take on a mortgage.
Here’s an idea: Just picture yourself in ten years time when the kids have finished college and you have just a few years before retirement catches up with you. Do you and your spouse really want to be rattling around in a great big family house and half an acre of garden and yard to maintain? Why not consider now paying off your mortgage sooner as interest rates are likely to go up rather than go down. Several circumstances had played right in front of you, seeing people struggle after losing a job and ultimately losing their home is an example. Paying your mortgage as soon as possible will help you save thousands of dollars in the years to come. It does not apply to everybody but if you have a few extra bucks at the end of each month then why not consider this.
Paying off your mortgage will also give you the security and peace of mind of having a place to live that is free from any debt in preparation for tomorrow. No one knows what tomorrow will bring as far as job security and our health. So by paying off early you can buy peace of mind and still have a saleable asset.
Let’s look at the ways to pay off mortgage that will help us debt free earlier than we thought possible:
- Pay your mortgage biweekly - this strategy is good as it will not allow interest to build up. If payment is made every other week then you were able to pay 26 half payments or 13 full monthly payments at the end of the year. There are several instances where you can make this payment possible. It also helps to pay in advance when you are receiving bonuses or commissions from your present job. It won’t hurt your pocket and it will certainly help you attain that goal of paying in advance in order to be debt free.
- Consider mortgage refinancing to a short term loan - the secret is to look out on the interest rate, if it dropped then refinancing is one of the best option. You can shorten the term of your loan and reduce the interest rate or both. You are the one who has the power to control your loan and no one else. You can refinance into a mortgage for 10, 15 or 20 years, it’s your choice.
- Planning is vital with your finances. Do your own computations in advance before you get committed into a mortgage arrangement that you will regret later. Think of your budget first without compromising your dream house. However, your cash flow has to come first and determine what it is that you’re entering into and how it works. Don’t just go into a situation that you have no knowledge about. As the saying goes ‘ignorance of the law excuses no one’. So be prepared and decide what’s best for you and for your future.
- Financing terms and conditions - as I’ve mentioned never enter into any terms that you are not familiar and no knowledge about. Adjustable rate mortgages does offer lower initial payments, this can be a way to convince buyers to buy the home that later on they will find out that they cannot actually pay it. Don’t fall into this trap; this is okay for folks who want to buy their dream house now but financially they are too stretched to meet the monthly payments, as long as your prospects of increasing your salary significantly in two to three years is achievable, then this is okay for you. On the other hand if you still got cash in your pocket after making a regular monthly payment then this plan does not make sense for you.
If you’re lucky and you are not feeling the pinch after you paid off your bills then make hay while the sun shines and pay your mortgage off early.
Comments (0)Subscribe to CommentsComment