Paying off a mortgage as soon as possible can help a borrower save money while building equity in the home at a faster pace. This gives a homeowner financial strength as well as the flexibility to sell the house in the future without worrying about losing money in the deal.
Here are 4 methods to reduce the amount of time it takes to pay off a mortgage. In the long run, many borrowers will save a significant amount of money and build equity in their home more quickly, especially if they combine several money-saving techniques like these.
#1 Refinance From a 30-Year Mortgage to a Shorter Term
For those who don’t want to wait any longer than necessary to pay off their home loan, it may be possible to refinance to a shorter-term mortgage. Instead of taking 30 years to pay off the loan, a homeowner can opt to pay off the loan in 10 years or 15 years. The shorter the term, the less interest will be paid on the loan, and the faster equity will build in the home.
#2 Get a Lower Interest Rate
Another good reason to shorten a mortgage term is to lower the interest rate.
Instead of paying 4.5 percent over 30 years, it may be possible to pay 4 percent over 15 years. This gives the mortgage holders the chance to build equity in the home faster as they are paying more of the principal balance with each payment.
#3 Pay Your Mortgage More Quickly Without Refinancing
It may be possible to pay your mortgage more quickly without refinancing, depending on the specifics of your loan.
Paying your mortgage biweekly is one of the more popular techniques of paying a home loan more quickly. But depending on the specifics of your mortgage, this may or may not save your more money than refinancing.
Learn more about paying off your mortgage more quickly by making biweekly payments:
#4 Stop Paying Mortgage Insurance
Those who are paying mortgage insurance could be paying $200 or more per month for nothing more than the right to protect the lender against default.
Homeowners who could qualify for a conventional loan should attempt to refinance to a conventional loan, if possible, to avoid making this payment.
If you are unable to qualify for a loan without mortgage insurance, there are still ways to cut PMI out of your mortgage payment:
As a mortgage broker, we act as an intermediary between you and the lending institution. Our principal job is to find a bank or a direct lender for your home loan, and get you the best possible mortgage for your specific circumstances.
When you are ready to explore the possibilities of saving on your monthly mortgage, or you are ready to purchase a home or refinance, please contact us.
Editor's Note: This syndicated content is edited by Marimark Mortgage before we distribute it, to better inform our readers.