Tips For Living Mortgage Free
Everyone wants to be out of debt, especially
homeowners. However, because very few people can afford to
make a huge down payment on a house, most of us finance loans
from their mortgage lenders for ten to twenty years. Many
don't want to even think about how many extra thousands of
dollars that doing so can cost, because they think there's
just no way around it. However, if you plan and strategize,
there are ways to pay off a mortgage early, even in some
cases, under five years?
Where is this magic solution? There's nothing magic about it.
It takes, determination, a certain amount of sacrifice and
yet, most people are willing to make sacrifices if it means
living mortgage or debt free. How do you do it? Do you think
you'll have to pay your mortgage lenders for the rest of your
life? Take a good look at your mortgage loan papers. First
determine your current rate of interest, your house payment
amount, and how much you're paying in interest charges every
month. Remember that when you make your house payment, loan
interest must be paid before any amount is applied toward
paying down your principal. Depending on your loan payment
duration, it's not unheard of for someone who has a $1200 a
month house payment to pay $1175 on interest.
However, paying extra every month helps to bring down the
principal owed on your house. After the current month's
interest has been paid, extra monies are applied directly to
the principal of the loan amount. So, paying off a mortgage
early is one of the best business decisions that homeowners
can make. Not only will you save tens of thousands of dollars
over the long run, but also, you'll be living mortgage free!
Think of all the things you can do with that extra money. The
possibilities are limited only by your imagination.
However, you need to read the fine print in your mortgage
contract and determine if any of your potential mortgage
lenders has set a cap on the amount of money you can overpay
on a monthly basis. For those who purchase a home with the
intention of paying it off early, an offset mortgage is your
best bet and will allow you to pay the loan off faster.
However, if you have a fixed or discounted mortgage rate, you
may have to pay an early payoff penalty, so it's always a good
idea to read through even the tiniest print before signing any
home loan or mortgage loan contract.
Planning an early mortgage payment strategy means getting your
debt and spending under control. Pay off high interest rate
credit cards, which means anything between 15-20%. The savings
you make on your mortgage payments will disappear with those.
Better to take care of the small stuff first, and then forge
ahead. Curtailing spending is another way you can save money
that can be better applied toward paying off a mortgage early.
Is it possible to pay off your mortgage lenders in less than
five years? Certainly! Of course, you need to make the best
deal you can when buying a house, and get the lowest interest
rate as possible. If possible, refinance with different
mortgage lenders and get yourself a better, lower interest
rate if possible. Paying extra on house payments helps bring
principle down and can save thousands, if not hundreds of
thousands of dollars in accrued interest payments over the
course of years.
If you can tighten your belt and do without a few extras that
you're used to, and you are determined and conscientious with
your money and savings plans, it is possible to apply hundreds
of extra dollars every month toward extra house payments. And
when you consider that just one or two extra house payments
every year can take 5-6 years or more off your loan balance,
the thought of skipping those nights out and that yearly trip
to Cabo really doesn't seem like such a big deal after all.
Average - 837 Total votes
For more mortgage articles
go to our sitemap.