There are several ways in which homeowners can try and pay off their mortgage quicker, and some tend to be more successful than others. While a lot will depend upon your own personal and financial circumstances, here are 3 ways that might help you pay off your mortgage quicker:
Increase the amount you pay every month
This is by and large the simplest and most effective of all the mortgage reduction strategies, and by increasing the amount you pay every month, you’ll gradually reduce the balance of your mortgage, irrespective of whether rates rise or not. If you’re new to the process or not sure where to start, consider consulting a mortgage broker for first home buyers. They can guide you through the nuances of the mortgage market and help devise a plan that fits your financial goals.
Increase the frequency of your payments
Effective under many circumstances, this strategy does require a few mortgage qualifications though, and it’s important to keep these in mind before you start trying to pay your mortgage off quicker with this method:
It can be helpful to have a mortgage payment schedule with a set due date, as if your mortgage payment is due on the 15th of each month, for example, you’ll only be able to increase the frequency every other month, unless you pay two mortgage payments in one month.
You can’t change your mortgage payment schedule, meaning that if your payment is due on the 1st of each year, and there are 365 days to pay it off in, you can’t increase the frequency every year, unless you pay more than 365 mortgage payments in a single year.
If your mortgage is amortized over 25 years or more, then this strategy will be most effective.
If you consolidate all of your high-interest credit card debt and any other debts that are particularly high, into a mortgage loan, you can make monthly payments that have a lower interest rate, but mortgage debt consolidation loans are not always the best option for homeowners, especially if any of the following apply:
You’ve got good credit and can get approved for other types of mortgage refinancing options, like a line of credit mortgage or variable-rate mortgage at similar rates. If so, then it would be more effective to pay off your credit card debts without consolidating them into a mortgage.
Your mortgage is amortized over 25 years or more and you can increase mortgage payments to pay it off quicker. However, it might prove more effective to simply increase the amount you pay every month, as mortgage consolidation loans typically have higher rates of interest than fixed-rate mortgages.
Mortgage debt reduction can be handled in several different ways, but it’s crucial that you find the right strategy for your individual circumstances, otherwise you could end up worse off. If you want to pay your mortgage off quicker and are looking for a strategy that will get the results you want, you can consult with a local financial advisor or mortgage broker.
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