5 Simple Ways to Pay Off Your Mortgage Faster

Debt is a complicated animal.  When most people want something they cannot afford, they search for ways to finance the purchase.

If You Can, Avoid a Mortgage Altogether

Once you sign those papers to put the house in your name, you’re strapped with debt.  If you’re looking for a quicker way out than your 15- or 30-year payment schedule, consider the 5 simple ways listed below to pay off your mortgage faster.

How to Pay Off Your Mortgage Faster

1. Switch to Bi-Weekly Mortgage Payments

By cutting your monthly mortgage payment in half and opting to pay every two weeks, you can ease your financial burden in two ways.  First, this spreads out the cash flow demand needed to pay your monthly bill and second, this also slips in one extra monthly-equivalent payment per year.

How to Pay Off Your Mortgage Faster

2. Make an Extra Monthly Payment per Year

This produces a similar effect as switching from the monthly to the bi-weekly payment amount shown above.  This has one extra monthly payment made per year and reduces your interest paid by $31,511.

How to Pay Off Your Mortgage Faster

3. Refinance into a Shorter-Term Loan

Do you have a 30-year mortgage and extra room in your budget?  Refinancing into a 15-year mortgage could allow you to pay off your balance faster.  Doing this will also grant you a lower interest rate compared to a contemporary 30-year mortgage (shorter loan terms are paired with lower interest rates) and have you pay significantly less in interest.

How to Pay Off Your Mortgage Faster

4. Place any Windfalls into your Mortgage

During the year, you might find yourself with excess funds you don’t know how best to put to work for you.  Some examples include a tax refund, a bonus from work, and an inheritance.  If you choose to use these funds to make a lump-sum payment toward your mortgage’s balance, you can make serious progress toward paying off your mortgage.

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