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.

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