Many homeowners opt to pay off their mortgage early. If, after looking at your current financial situation and future investment goals, you can afford to do it, paying off your mortgage earlier could save you money in interest rates. These four suggestions can help you do it.
Pay more each month
Use a home loan calculator from your Fort Myers lender to calculate how much principal and interest you pay each month. Determine how much more you can add to your monthly payment. Then meet with your lender to find out how this extra payment finds application to your mortgage.
Check your next statement to ensure the bank has applied the additional payment.
Consider refinancing with a short-term mortgage
A few years after starting to pay off your loan, you could opt to refinance your loan at a lower percentage while reducing the number of years you would have taken to repay the loan. Although you will need to pay more each month to refinance the loan, you could shave off several years from your current loan term.
Make an extra mortgage payment every year
Every year, you could submit 13 payments instead of 12. If you are repaying a 25-year mortgage, doing this starting from the first month of payment will slash your repayment period by a few years. You will also save significantly on interest.
Use unexpected income to pay off the mortgage
If you got a tax refund or a bonus at work, you could channel some or all of it towards your mortgage. If you do so whenever an unexpected windfall happens, you will be pleasantly surprised how much time you deduct from your current repayment period.
Everyone wants to clear their debt as early as possible, and if you can do it, there is no reason to delay. By using a few ingenious tactics, you too can clear your mortgage early and save a small fortune in interest money.