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Tips for Paying Off Your Mortgage Sooner: Accelerate Your Path to Homeownership

By

MK
*

Published in

Finance
*

23 Aug 2023


For many, a mortgage is the most significant financial commitment they'll ever make. But the dream isn't just to become a homeowner – it's to be mortgage-free. In today's blog, we'll explore actionable steps to pay off your mortgage faster helping you achieve true financial freedom sooner.

1. Make Bi-weekly Payments: Instead of a monthly payment, consider breaking your mortgage payment in half and paying bi-weekly. This results in 26 half-payments, equivalent to 13 full payments in a year, allowing you to pay an extra month's worth annually.

2. Round Up Your Payments: Even small additional amounts can make a difference over the life of a loan. Rounding up your monthly payment can chip away at the principal faster, reducing the amount of interest you'll pay over time.

3. Make One-time Lump Sum Payments: Received a tax refund, bonus, or inheritance? Consider making a one-time lump sum payment towards your mortgage. This directly reduces your principal, leading to **savings** on interest.

saving on mortgage

4. Refinance to a Shorter-Term Loan: Refinancing your mortgage from a 30-year to a 15-year term can save you money on interest and help you become mortgage-free faster. However, always consider refinancing costs and ensure the new monthly payment fits your budget.

5. Allocate Windfalls and Bonuses: Instead of splurging with unexpected income, allocate a portion or all of it to your mortgage. Over time, these additional payments can substantially decrease the life of your loan.

6. Review & Cut Unnecessary Expenses: Conduct a thorough review of your monthly expenses and identify areas for cutbacks. Redirecting even a small amount from non-essential expenses to your mortgage can compound over time.

7. Stay Informed on Interest Rates: If interest rates drop significantly below your current rate, refinancing can save you money, allowing you to pay more towards the principal. Always stay updated and discuss with a mortgage professional when considering refinancing.

decreased interest rate

Achieving a mortgage-free life is not just a dream; it's attainable with dedication and smart financial moves. By incorporating some or all of these tips into your financial strategy, you can accelerate your path to full homeownership and enjoy the peace of mind that comes with it.

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MK
MK
22 Aug 2023
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