Mortgage loans are often one of the largest loans and the most important that a person can take out during their lifetime. If you have a mortgage loan, you are probably interested to learn the ways in which you could pay off the loan as quickly as possible.
There are a number of different ways in which you can pay off your mortgage loan quickly. Choose the option, or options that best fit your particular situation.
One way you can pay off your mortgage quickly is to make as many extra payments as you can possibly afford very early during the life of the loan.
The extra payments should be made by check and the notation in the Memo line should read “Apply to Principal.”
If you neglect to include this on the memo line, the mortgage lender may apply your extra payments to interest, rather than the principal of the loan. This will not eat away at your mortgage loan as quickly.
Another way you can pay off your mortgage quickly is to make a large, extra payment on an annual basis.
Put any money you receive from your tax refund towards your mortgage. Or, put your annual salary bonus towards your mortgage. These kinds of extra payments can drastically decrease the amount of time you will be paying your mortgage.
If large, bulk payments are not of interest, consider paying an extra $100 per month towards your mortgage loan. The extra money you send to your lender will eat away at the outstanding loan amount, thereby getting you that much closer to paying off the mortgage.
Extra payments are not always the most cost efficient way to pay off your mortgage quickly.
If your mortgage loan has a low interest rate, it might be smarter to invest your extra money in a high-yield interest bearing account. Money that sits in an account that has a high rate of interest can double, or triple in a short amount of time.
Sometimes, letting your money earn you more money is a wiser investment. After your money has grown in the high interest account for a while, use it to make a large extra payment towards the principal of your mortgage loan.
Use a mortgage calculator to figure out how long it will take you to pay off your mortgage and how much money you will be paying, in total, for your mortgage. The mortgage calculator will tell you how long you will be paying and how much.
A mortgage calculator is a useful tool in figuring out the most basic details about your mortgage loan.
If your initial mortgage loan interest rate is higher than you are comfortable with, investigate your options for refinancing. If interest rates are lower than they were when you secured the mortgage loan, you may be able to refinance.
A refinanced loan at a lower interest rate will save you money in the long run. There’s nothing more satisfying than making that last mortgage loan payment. The faster you can pay off your mortgage, the better.