Best Ways to Repay your Mortgage

There are some great ways for you to repay your mortgage so that you can get it taken care of in less time. Think about how you will be able to save lots of money over a 30 year loan by implementing these simple but effective methods. If you get paid every two weeks, set your mortgage up to pay it in such installments instead of a lump sum each month. There will be a few months per year when you get three checks, and that means an extra half payment will be made.

Try to pay extra on each payment, and soon it will just be part of your budget. If your payment is $890 a month, try to pay $1000 per month. Then each month you have at least $100 extra that is going towards the principle balance that you owe. When you get any extra funds such as a tax return or a bonus at work, at least half of that free money should be paid on the balance of your mortgage.

Pay attention to the changes in interest rates out there too. If you are able to get a rate that is even 1% lower than what you pay right now, then you are going to save a great deal of money. The longer you still have on loan to pay, the more money you will save. If you are at a high rate of interest right now, you may end up refinancing several times over the course of the loan. Don’t borrow more than what you owe when you refinance though. It can be tempting to use that equity but leave it alone.

The trick though is to continue to pay that higher payment! If you can get lower interest and take that $890 payment down to $775 a month, continue to pay $1000. Now you have at least an extra $200 per month that is going towards that loan repayment. As your loan balance drops, consider reducing the amount of years on your loan too.

For example, if you have 20 years remaining on your loan, refinance at a great rate and go for a 15 year loan. If you have 15 years remaining, refinance to get a 10 year loan. There are plenty of calculator tools online that will help you to figure out how much you can afford to pay. These calculators can also show you how much you will save by using these ways to repay home loans. Once you see how it adds up, you will be encouraged to get started using these methods.

Set up direct payments to the lender from your bank account too. This will help you to budget better as you won’t be tempted to spend that money on something else. You will also be able to avoid late payments due to not getting the check in the mail early enough. This is also going to save you money so that you aren’t wasting money that could be used to pay down the balance on your mortgage.