The house is perhaps the most expensive purchase that we all do in our lifetime. But at the same time mortgage loans also bend our backs and it seems that we are going to stay entrapped for the rest of our lives.
If a mortgage loan is bothered you, weighing heavy on you, there are still certain things that you can free yourself from the monthly mortgage payments and save some money. If you want to clear or pay off or settle your mortgage, here are some outstanding ways to do so.
- Get your mortgage refinanced with a lower interest rate
The prevailing low-interest rates on mortgage loans are a good opportunity to refinance your current mortgage loan and pay it off. Make use of the mortgage loan calculator to find out and see the one that best suits you.
A mortgage refinance can work for you in a couple of ways. When you get your mortgage refinanced at a lower rate of interest, you land up paying against the principal balance of the loan. Now, you can either choose to keep paying towards the original mortgage payments to pay off your principal fast or you can even refinance for a short-term loan. The second option will help you reduce your principal balance much faster.
- Make more frequent mortgage payments
This way you do not make one monthly payment, but half-size payments every two weeks. This results in extra payments for the whole year. This will not impact your budget, as you pay the same amount against the mortgage, but as there are 52 weeks in the whole year, paying bi-weekly will result in 13 full-sized full payments more. This will erase your mortgage quickly.
- Make extra payments against principal payments
Most mortgage lenders allow extra payments against the principal amount. This means the extra payments that you make goes against paying the principal and not against the principal and interest both. Paying even a little extra whenever you have extra cash with you can go a long ahead in reducing several numbers years of your mortgage loan.
- Curtain your extra expenses and apply them against your mortgage
Whenever you have some extra savings or you get some extra money to your account, don’t sleep over it or use it anywhere else. Cut your expenses and save money and put it towards your mortgage payoff. Extra mortgage payments by curtailing your other expenses, quarterly or half-yearly, or yearly, can be a great opportunity in expediting your mortgage payoff.
- Resize your housing
The idea here is to sell your bigger house and buy a smaller house. The extra money from the sale can be used against paying off the mortgage. This also eliminates the need for any mortgage. If not, at least you will be free from paying any hefty down payments.
Before you pay off your mortgage, make sure that you review your mortgage documents. There may be some pre-payment penalties and other charges as well.
