Let’s face it, most homeowners in the U.S. have to contend with long-term mortgages. Stats show about 88% of them opt for mortgage plans. And of these, 90% of home buyers go for a 30-year payment plan. Quite simply, that looks really long time. But that’s only because people wouldn’t want to pay exorbitant monthly mortgage payments.
Along the way, however, things are bound to happen. As a result, many debtors fail to comply with the monthly payments. And there goes the rub. If only there were better options in place.
The truth is that paying your mortgage can be every bit challenging. That’s especially true if the mortgage company is very strict with compliance. The good news is there are ways you can smoothen the experience, tried-and-tested ways. So buckle up. We’re showing you the essentials of paying your mortgage way earlier than you actually have to.
Make Extra Home Payments
The first option you have is to make extra home payments. Now, you have to be extremely careful when doing this. Find out from the mortgage company if it’s okay to make extra payments as some don’t allow. Also, make sure that the extra payments don’t go to the interest. It should be deducted from the principal amount. That way, you can pay up faster.
One option you can opt for is the bi-weekly payments. When you do this, you will pay for 13 months in the year instead of the regular 12. If you’re opting for this, don’t forget to confirm with the mortgage company if it’s acceptable.
The other option is simply paying more each month. So apart from the regular amount to be paid each month you pay more. Now, there has to be a distinction. The extra amount you pay should be for the principal amount and not the interest.
Another common option is mortgage refinancing. This is quite simple. It’s just basically changing the payment plan for your mortgage. So if, for instance, you are on a 30-year plan, you can change to a 15-year plan. And if you are on a 15-year plan, you can switch to a 10-year plan. That way, you can pay up faster.
Of course, if you’re doing this, you should have the financial muscle to make it happen. Meaning: You should be able to pay the monthly amount for the new plan. Why? That’s because your monthly dues will surely get bigger if you shorten the timeline of your payments.
Opt for the Dollar-a-Month Plan
This is another good plan that you can opt for. This is quite simple and wouldn’t strain your finances as much. All you have to do is add a dollar each month you pay. So, for instance, this month, you pay $1,000. Next month you should be paying $1,001. And then add one dollar every month. Before you know it, you’re closer to paying it off completely.
Use Unexpected Funds
There are times that unexpected funds come into the picture. When that happens, you can use it for your mortgage loan. For this as well, you have to confirm if it’s okay. If they do agree to you paying, then ensure it is for the principal amount.
Downsize Your Home
Although a bit drastic, this can be a good plan. When you downsize your house, you get a smaller house. This means that for the house, you got the mortgage loan you sell it off. Sell it at an excellent price and make sure you’re making enough profit. And then get a smaller house using part of the money received. And for the rest of the money, you can pay part of the mortgage loan. The goal at the end of the day is to pay off the mortgage faster.
With the tips above, paying off your mortgage loan should be a whole lot faster and easier. That’s telling you when you put focus into it, miracles can happen.