Denver Homes Online

Pay Off Mortgage Faster - Sooner

The Best Ways To Pay Off The Mortgage Loan 
Faster & Sooner!

The Best Ways To Pay Off The Mortgage Loan Faster And Sooner 

Pay More: Paying as little as $100 extra every month, significantly reduces your interest over the life of the loan. You will payoff the loan earlier, too.

Round-Up: Instead of paying the same coupon amount every month, consider rounding-up every payment with a little extra. If your payment is $1219, for instance, raise it to $1250 or $1300. That extra amount you pay by rounding-up probably won't be missed that much, but you will SAVE A LOT over the life of your loan. That will be noticable! A word of caution, however, be careful to check the terms of your mortgage to insure that you are allowed to make pre-payments, and will not incur any prepayment penalties.

Refinance: Always Refinance Into A Shorter Term: When the time comes to refinance your mortgage loan, carefully consider a 10, 15, 20, or 25 year mortgage loan. Most homeowners are tempted into refinancing with another 30-year loan, but that only prolongs the misery and significantly adds to the total interest you will pay. It is true that payments will be higher on a shorter terms loan, but its not that much higher.

Bi-weekly Payments: Take full advantage of all 52 weeks in the year. When you pay a mortgage payment every other week, versus every month, this will force you to make the equivalent of at least one extra monthly payment, every year. Doing so will remove a full 6-years from your 30-year mortgage. Talk to your mortgage lender to make sure the extra payments are being applied toward principal reduction.

Avoid Starbucks: Put the extra savings into your monthly mortgage payment. Put that money in a jar, and just watch at how quickly the money adds up.

Pack A Lunch: Same as above.

Coupon Savings: If you have a penchant for clipping coupons on your grocery shopping, set aside the money saved and use that towards making a higher mortgage payment each month.

Pay Lump Sums: Whenever possible, pay a lump-sum towards principal reduction on your loan. Sell some stuff on craigslist. Pay a lump sum whenever possible.

Save Your Raises: Increase your mortgage payment every time you earn a pay raise. Another way of forced savings, but you probably won't notice the money missing.

Adjustable Rate Loan Savings: If you have an adjustable mortgage loan and interest rates fall, most folks simply reduce their payments accordingly. Continue to make the same level payment during these periods of lower interest rates, and save.

Part-Time Job: Apply all that extra income towards mortgage reduction, make some new friends, and build that security every month.

Review Budget - Reduce Expenses:  Everyone probably has some ways to identify waste in the budget, and cut the monthly expenses. Here are a few suggestions that may work - you get the picture: 

• No Cable TV: Save $500/year
• Change Car Insurance - increase deductible: Save $300/year
• Set A Limit On Christmas Gifts: Save $300/year
• Less new clothes and shoes: Save $1,000/year

Reward Yourself: Its hard to stay motivated at times, without giving yourself a little reward for the good progress. Slurge on a dinner out, or buy yourself a gift with some of the money saved. Keep it up and it'll pay huge dividends in the long run.

Regardless of which of these methods you choose, all will result in a much faster pay-off of your mortgage loan.  In doing so, you'll save tens, if not, hundreds of thousands of dollars in interest payments, over the life of your loan.  To keep yourself on course, its smart to get the support of family or friends who'll help you stay accountable.  Hopefully your progress will rub off on them, too.

Watch video.

To request an amortization schedule that will help you chart your payoff progress, request one here.

What's Your Denver Home Worth NOW?

Get Your Answer Here
enter your address, city, zip 

Property Values Video

Michael Dagner is an expert in Denver-Area home sales.
Call today, (303) 514-4000, for help with your home sale or purchase.

RELATED ARTICLES

by Michael Dagner: Google+