For most people, their mortgage is the largest debt they have above student loans, car loans, credit cards and even personal loans. It’s more likely that you’ve considered paying down your mortgage earlier over you plan for your retirement. You may be wondering is it wise to pay off my mortgage earlier?
All this depends on with your current financial situation. If you have other pending loans that are hard pressing you, then you’re better off paying these other loans than your mortgage. You also need to talk to your lender about what happens if you pay earlier than what the terms stated as some companies have penalties for early payments. With that said, here are some ways you can pay off your mortgage early.
Add some amount to your monthly payments
Extra payments made go straight towards the principal. A regular payment in your early repayment days goes towards the interest rate. Adding a $100 to your monthly payment could help you save more money in interest.
Make bi-weekly payments
We all know that traditional mortgage payments are paid on a monthly basis. Nevertheless, some companies can allow you to make bi-weekly payments, that are 26 payments annually or an equivalent of 13 months. Bi-weekly payments can save you up to 6 years’ worth of mortgage payments.
Refinance your mortgage
Refinancing a loan to a shorter term is another way to repay your mortgage faster. If you have a 30-year mortgage, you can refinance to a 15-year mortgage to avoid incurring thousands of dollars in the interest rate.
Cut expenses and save towards your mortgage
If you have to, cut out extra living expenses, cable cords and switch to a cheaper cell phone plan. You can now use the money saved to make extra mortgage payments.
If you would like to learn more about Michigan mortgage interest rates, Kalsee Credit Union suggests you talk to a financial provider in your area who will be glad to explain to you what will determine the interest rates you pay. Additionally, they'll be able to advise you on whether it’s wise to repay your mortgage early.