How to Pay Off Your Mortgage Early

How to Pay Off Your Mortgage Early

How to Pay Off Your Mortgage Early

Sometimes you think  that paying your 30-year mortgage payments will take the rest of your life but you can change that. Paying off your 30-year fixed-rate mortgage payment can save you a lot of money in interest charges. For example, you have a mortgage in your home of US$300,000 with an interest-rate of 5.5 percent, you can cut 5 years off your loan term and save around US$60,000 in interest if you pay one extra payment a year, according to the publication of SFGATE. Make sure your payment is applied to the principal balance and that your lender does not charge any prepayment penalties. 

Another option is make an extra payment each quarter. Example: In a US$220,000 mortgage with an interest-rate of 4 percent in a 30-year period, according to Dave Ramsey, you will save US$65,000 in interest and pay off your mortgage early by 11 years. Also make sure your payment is applied to the principal balance and that your lender does not charge any prepayment penalties.

You also can use the biweekly payment system. That system is used to shorten your loan's amortization chart or schedule. What means that? Means that instead of making a 12 payments in a year, you will make a half-sized payment every 2 weeks, which will add up to a 13 payment a year according to the publication of The Mortgage Reports. With that extra mortgage payment, the principal balance of the loan will get reduced which will shorten the payoff period. Some banks can set up this payoff plan for you but if you do by your own you will not be locked into a biweekly payment contract with the bank if you change your mind.

And, if you receive an inheritance, tax refund or bonus, apply it to the principal balance of your mortgage loan making a lump-sum payment. The interest savings could be better than any potential investment.

And, finally, you can decide for a refinancing of your mortgage. Refinancing your mortgage is getting a new loan to replace the original. Refinancing your mortgage can help you get a shorten loan term and commit to higher payments to pay off your debit sooner. You also can take advantage of better interest rates. And, if your actual mortgage has a penalty for early payment you can refinance and choose another one without that penalty clause. Refinancing could allow you to pay off your mortgage early, years early,even; and, save you thousands in interest.

If you have a Real Estate question, Contact Me. 


Ana Claudia Nascimento Headshot
Author:
Phone: 305-494-3756
Dated: May 8th 2019
Views: 74
About Ana Claudia: Ana Claudia Nascimento is a Sao Paulo-Brazil native. She speaks English, Spanish and Portuguese. A...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Point East Condos - Aventura, FL - 55+ Community - POINT EAST CONDOS - Aventura, FL -
Tenants Move-in and Move-out Procedures - TENANTS MOVE-IN AND MOVE-OUT
How to Pay Off Your Mortgage Early - How to Pay Off Your Mortgage
FIRPTA Foreign Investment In Real Property Tax Act - FIRPTA is short for 'Foreign

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

La Rosa Realty, Hollywood
2455 Hollywood Blvd Suite 210
Hollywood, FL
321-325-4630