How to Payoff Your Mortgage Faster

 It is pretty much everyone’s dream to own a new San Antonio home. So, when this dream becomes reality, another dream immediately takes its place—how can this house be paid off in the fastest amount of time? This is a question that most of us ask ourselves when we send the first mortgage payment to the mortgage company or to the bank. Often times, the reality of paying a mortgage payment for the next thirty years makes us want to do something about it, and that something is to pay off the mortgage as early as possible.

So, how do you go about paying off the mortgage in the fastest possible time? Here are some simple strategies to follow in accomplishing your task. Of course there are numerous ways to accomplish your goal, and now I will discuss a few of the easier ones.

First, before signing off on any mortgage loan, make sure that there are no penalties for paying extra each month, in addition to the monthly mortgage. Some lenders will penalize borrowers for doing just that. Paying more than the normal mortgage payment each month is a great strategy for paying down the principal of your mortgage.

Second, set up a bi-monthly payment plan with the mortgage company, especially if you get paid every two weeks. This way, it will be easier to stick to the budget. It is always easier to make small payments every two weeks than to make one large lump sum at the end of the month. If you are a first time homeowner it can be less intimidating to do it this way. Keep it simple and you will experience better success. In addition, paying every two weeks, or bi-monthly will help you pay an extra month’s mortgage every year. Instead of paying 12 payments a year, you end up paying 13, one extra payment a year at the bimonthly pace.

Third, utilize job bonuses or raises from career advancements to pay toward your mortgage. Any extra dime or nickel should be sent to the mortgage company to help pay down the loan.

Finally, like a detective, keep a watchful eye on interest rates. As soon as they fall, jump on them and refinance to a lower mortgage rate and shorten the term of the mortgage, if at all possible. Just try not to keep the term the same while taking money out. Such a move could be disastrous. While refinancing, switch the mortgage from a 30-year fixed rate mortgage to a 15-year fixed rate, if you already have a fixed rate mortgage.

The interest rate is a lot lower at 15 years than it is at 30. The disadvantage is that one will end up paying more each month with the 15-year option. But, this is to be expected. The bright side is that the mortgage will be paid off at a faster rate. If you have an adjustable rate mortgage, it would be wise to refinance and switch to a fixed rate mortgage. Fixed rate mortgages don’t fluctuate up and down with the national interest rate as do adjustable rate mortgages.

Yeah! It is everyone’s dream to own that magnificent home, but reality sets in when the first month’s mortgage payment is due–how can we payoff the mortgage in the fastest possible time? Thirty years is a long time when paying off a loan! These are some of the things that the first-time home buyer utters when they finally set foot in their dream home, and begin to make payments!

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