It is not always possible, and, sometimes it is not a good idea too, to invest a substantial amount of money on a property or an asset that you want to own from the money you have. Taking loans are your best option for proper financing. Once you take a loan, you have to pay the mortgage. Due to the rates of interests, the mortgage amount tends to keep increasing over time, so that your final amount becomes much higher than the principal one. Therefore, paying off the mortgage amount as soon as possible should be your top priority while taking a loan. The budget you finalize on should be dependent on the mortgage amount and if you will be able to pay it on time. Sounds simpler than it is though.
To achieve the repayment of the mortgage in your desired amount of time, you need to have proper planning. Consult a financial advisor if required. Make sure that the plan is made in such a way that you can pay off your debts in the fastest time period possible with minimum interests. In this article, a few of the points have been discussed which you can consider to repay off your mortgage fast.
Understand and utilize mortgage points
Whenever an investor wants to find out how much the mortgage would approximately cost them in a month or over a period of a year, the lender will come up with something called mortgage point. These points are kind of savings on your loans. They are of two types. The discount point makes sure that you eventually pay less when you pay more at one time, as the interest rates are lower and the origination fee that the lender takes to facilitate your loan.
If the property is there to stay for a long time under your ownership, it is advisable to make use of these points. You could easily save some money which you can again use to pay more amount of mortgage.
Re-evaluate your loan
The truth is that the market is changing almost every day. New lenders are cropping up who are ready to support investors and give them better interest rates than before. If you have been paying your mortgage for a while, it might be a good idea to re-evaluate your loan, to make sure that you are still holding the best deal possible and are not getting scammed by your old lender.
Though re-evaluation and changing of lenders may incur some additional costs, at the end of the day, you should look at the bigger picture of the total amount you are spending and then take a call.
Pay down your other debts.
As any financial advisor will tell you, you should always look forward to reducing your loans by paying off the biggest one first. This way, your interest amount will also reduce, and a significant burden will be removed from your head.
Once these additional debts are paid off, you will have more amount in hand to repay the mortgage, and thus you can complete it faster. It is a win-win situation for all.
Use your tax refunds
Once you pay your taxes completely, after all the calculations, you always tend to get back a certain amount of money as tax refund every year. Sometimes the amount would be equivalent to almost the mortgage amount for a month. So, if you use that, you will be paying for an extra month in a year.
You can save almost a year’s payment if your total duration of payment stretches for around 10-15 years. The calculations are simple and the outcome fantastic.
Refinance your mortgage
Sometimes you should refinance your mortgage, especially when you have an increased source of income and are making more money than before. You could hike up your monthly mortgage amount, and this will automatically lead to your loan being paid faster. You could even look at debt settlement to handle your debts better.
Other than the points mentioned above, being more frugal in your lifestyle, adding money from additional incomes, renting out space etcetera are a few of the other techniques that you can think about to pay off that mortgage faster than you thought you would.
September 1, 2018