Nobody likes being under the weight of debt, including the massive debt that is a home mortgage. To get out of this debt as quickly as possible, many homeowners choose to take a more aggressive approach to paying off their mortgages. In this article, we’ll explain three time-tested methods of paying off your mortgage.
But first, realize that your lender may not allow you to pay off your mortgage early. Some lenders impose strict penalties on early payments while others only allow you to make additional payments at certain times of the year. If your mortgage lender is on board with you paying off your mortgage early, these three methods of repayment could save you thousands in interest and get you free of mortgage debt in less time (source https://askross.ca/second-mortgages-toronto-and-gta/ ).
Make Biweekly Payments:
This approach is quite popular because it doesn’t typically require the homeowner to reassess their budget. Instead of making your monthly payment in full once a month, make a half-payment every two weeks. Your budget remains the same, but you get the added benefit of making an extra payment each year. This is because there are 52 weeks in a year. This results in 26 half-payments, or 13 full payments. Making biweekly payments can really knock down what you owe on the principal of the loan.
Make Additional, Full Payments When Possible:
While one extra payment per year can save you quite a bit, an extra payment each quarter (for example) could cut down the time you spend in your mortgage even faster. If it is at all possible, consider doing this to accelerate your repayment of your mortgage.
Even if this isn’t possible, it cannot hurt to add a small additional amount to your existing monthly payments. Even an extra $50 each month can add up quickly, resulting in surprisingly high savings!
Boost Your Income and Cut Your Costs:
If you make a few small changes to your lifestyle, you might be surprised at how much money you can save. Unnecessary expenses, like frequently dining out, add up quickly. By making small budget cuts to these unnecessary things, you could invest more of your funds toward your mortgage.
If possible, consider taking actions that will get you more money. We know that this is easier said than done, but it is certainly possible. Home-based career opportunities, for example, are a great way to funnel “extra” money into a household with minimal expense and maximum flexibility. It might also be a great time to ask about that raise or promotion at work.
No matter how you get more funds into your bank account, whether through saving or acquiring more money, this can only help you take greater strides with your mortgage.
Of course, all three of these options are only viable if your lender will allow for you to pay off your mortgage early. If they do not permit it, then you might be stuck with the term of your mortgage unless you are willing to pay penalty fees.