There are a few different strategies you can use to actually pay your mortgage off sooner than the 15- or 30-year term that you’re scheduled for.
The first thing you can do is call your lender and start utilizing a bi-weekly payment plan. Every 15 days, half of your payment will be withdrawn from your bank account and directly paid to the lender. Believe it or not, this method will reduce the amount of interest you will have to pay and pay off your mortgage earlier in return.
Another strategy is paying a little extra on every mortgage payment that goes toward your principal. Rounding up the number a little bit will also help you pay your loan off earlier.
“The first 15 years of payments on a 30-year loan are mostly interest.”
A third method would be to refinance your loan from a 30-year note to a 15-year note. This will increase your payment significantly, but will also cut the time you have to make them in half. Just remember that every time you refinance on a 30-year loan, you incur quite a few fees and will restart the time on your note.
Also, keep in mind that the first 15 years of a 30-year loan consist mostly of interest. It’s not until year 15 where you’re paying as much in interest as you are on the principal.
If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
