An Easy Guide to Pay Off a Mortgage Early

paying off mortgage

*This blog post is my personal opinion and for education purpose only and may contain affiliate/referral links.

Paying off a mortgage should be a primary financial goal for any homeowner because this is most likely the biggest debt he or she will deal with in his/her lifetime. Housebuying is a process and it starts with saving for a deposit and then when all the necessary requirements are satisfied, getting approved for a mortgage. This post will cover some rudimentary and concrete ways to pay off mortgage quickly and effectively, and is catered to both new and old houseowners.

Never underestimate the benefits of paying off mortgage early

Whether it is your first or second or one hundreth property, a house deposit will always cost more, and for each loan that is approved, years of payment are scheduled to be made. Aside from the monthly repayments, there’s also thousand of dollars to be paid for property taxes, home repair and maintenance cost and other expenses that come for being a homeowner. There’s a lot to reap when you are not paying any mortgage anymore. The savings that await you every month will be immense and can be used for other productive investment and projects. Maybe you can buy another property and turn it as an income-producing rental or start a small business or use the extra money for your kid’s college education, you get the idea. Extra money saved means more ways to secure your finances and future.

Faster ways to pay off mortgage

Not everybody can pay off a mortgage in one go, but that is obviously the fastest way to do it. Cash buyers have ready money to make the lump sum payment. This may be the case for many of the auction purchases out there and other cash only house sales. Majority of the loan that would be issued though would be for a multi year mortgages. 30, 25, 20 years or however the bank designed your term, these are the typical length that would be the responsibilty of the homeowner. Making a routine and auto deposit monthly would ensure the payments are flowing and no late payment penalties are being incurred. The homeowners also has a choice between paying a fixed rate or a variable rate repayment, and it is at the homeowner’s benefit to read the fine details of their mortgage loan condition. Having a fixed rate may tie you up to a fixed payment for the agreed years but may not let you up your repayment, whereas a variable rate may let you increase your monthly repayments for a faster way to pay off your mortgage.

Some basic personal finance mortgage tips

Where do personal finance comes in on your mortgage payment journey? Some tips can go a long way to shorten your mortgage payments. It takes time and financial planning before you can be ready to purchase a property. When buying a house, don’t buy for more than you can afford because you would be setting yourself for more problems later. The bank or lender would definitely tell you if you cannot afford a big loan, so do your planning very meticulously. Part of this planning is to get a loan where the mortgage interest rate is likely to be lower than it will be later, in this scenario you can aggresively pay more early, or just go with the minimum and have that extra savings to keep for other property expenses and maintenance or to spend for your retirement and investments. At any case, paying extra each month will do wonders for you in the long term. Some advance tips you ought to learn and explore too is the tax savings from your mortgage interest and also considering a refinance when the situation is right. As a homeowner myself, i know we all have different loan and mortgage scenarios but what i would always encourage is to read and learn more from reliable resources and professionals.

Thanks for reading.

Jay

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