Just imagine not having that mortgage payment to make every month and the feeling when your home officially belongs to you and not part to your lender. Here are a few tips to make that goal a reality.
1) Refinance for a lower interest rate
Many people never refinance their loan throughout the 30 year term even though rates have fluctuated and in recent years have gone down drastically. Even the slightest decrease in your interest rate can actually save you hundreds or even sometimes thousands of dollars over the course of your loan term.
So, if you plan on staying in the same home for at least three more years you should ask your lender how they can help you with refinancing. Be sure to get together the paperwork such as proof of income, copies of information about your assets, bank statements and tax returns for two years and check that your credit score is still in good standing.
2) Refinance to decrease the length of time of your loan
Typically, people want their mortgage over as long a time frame as possible to reduce their monthly payments. But who wants to be paying a mortgage on a retirement income? Check out the refinancing deals for shorter time periods as when mortgage rates are low it can make only a small difference, to pay your mortgage off even quicker. That time difference can lead to a massive savings when it comes to the amount you would pay in interest.
3) Make a lump-sum payment on your mortgage
If you suddenly come into a little cash from a tax refund, or an inheritance, or a bonus at work, use some of this cash to pay down your mortgage. It will have no effect on your monthly payments but it will mean that your mortgage will be paid off that much faster.
4) Switch to paying every two weeks
Pay half of your mortgage every two weeks and you could reduce your 30-year term significantly and save tens of thousands of dollars over the whole term of the loan.
5) Round up your payment.
If you just round up your payment each month then every extra bit of money you pay will be taken off what you owe and you will pay your mortgage off even faster. Even an extra $5 a month will make a difference.
If you’re in need of a mortgage review to see how else you could be saving money give me a call today!