If you have a mortgage, you’ve probably fantasized about the day you get your home paid off. And why not? Taking your mortgage payment off your plate would free up the largest chunk of your monthly budget to be used for anything from vacations to extra retirement savings.
It is within your reach to pay off your mortgage early. You just need to create a plan — and then commit to sticking to it. Here are seven tips for paying off your mortgage faster through extra payments or refinancing.
Make Extra Payments
Paying more on your mortgage loan than is required is the most straightforward ways to get your mortgage debt cleared faster. Where can you find the funds to do this?
Scour your budget for fat and chop it away. Do you use that gym membership? Those multiple streaming services? Do you have to go out to lunch every day? Could you slow down on shopping? Can you use more coupons? Find ways to cut costs in your budget and put every dime of it toward your mortgage loan.
Get a side hustle
Find work two or three evenings a week or on weekends. Nowadays, you may even be able to find a job working from home. Even a hundred or so dollars can add up when you throw it on top of your regular mortgage payment.
Earmark every raise
If you get a raise, that’s money that isn’t spoken for in your current budget. Add it to your mortgage payment and you won’t even miss it.
Use every bonus and cash gift
Are you receiving an end-of-year bonus, or do your parents give you birthday cash? Instead of blowing it on something you don’t need, put it toward your mortgage loan.
Refinance Your Mortgage
Sometimes refinancing can cut years off a homeowner’s mortgage note. Some tips for refinancing to pay off your mortgage faster are:
Work on your credit score
If you didn’t have perfect credit when you bought your home, your mortgage loan may not have the best interest rates. Pay your bills on time, pay down your credit cards, and manage your bills wisely every month. Over time, your credit score will go up, and you can qualify for better rates.
Reduce the loan term
If you’ve paid on your home for several years, you may be able to refinance into a shorter mortgage loan and cut literally years off your note.
Get out from under private mortgage insurance (PMI)
Folks who have built up over 20% of equity in their home may be able to get out from under the pricey PMI that’s required for lower down payments. If so, put the money you save toward your remaining mortgage balance.
Paying off your mortgage early is within many homeowners’ reach. You just have to commit to chipping a bit extra away at it every month. Over time, your determination will pay off, and you’ll own your home free and clear.