How to Pay off Mortgage Very Quickly
Do you want to lead a mortgage free life? Now is the time to take that bold step into a financially sustainable future. There is a simple and straight forward way of paying off a mortgage loan, which helps you save a lot in terms of interest. Note that at the moment, most of your mortgage payments are channeled towards paying interest. For you to be able to see progress on your mortgage loan, you should ensure the payments are channeled towards offsetting the principle, and not only the interest.
If you start reducing the principle amount of your mortgage loan now, rather than till the maturity of the loan, you will end up saving tons of cash and paying off the mortgage very fast, accelerating your chances of becoming debt free very fast. Remember that one way or another you will have to pay that principle amount so why wait till you pay a lot on interest? The secret to be able to pay off your mortgage faster so you could touch on the principle amount is to ensure you pay a little more extra each month than the required minimum payments.
Paying off the mortgage fast is more or less like making a long-term investment. While the money will not come back to you directly, at least you will reap the rewards of your investment later on in terms of interest savings and more importantly leading a debt-free life. You might be wondering, but by how much do you get to pay that extra payment? Note that you are not paying more than you can afford, you are simply paying your mortgage as fast as you possibly can so you can be able to leverage on the saving opportunity.
The easiest way to get started on paying off your mortgage fast is to simply calculate at least 45 of the total monthly payments that you channel towards the mortgage loan. The figure you will get will become the extra amount you will be paying each month towards the principle. What you do here is to write a check of the amount you will get equivalent to 4% and make a note to your lender that you want the extra cash to be applied to the principle amount. In other words, you will be giving your lender an ‘annual raise’ of that 4%. While this will not put a lot of pressure on you, in a matter of time you will have paid off the mortgage much faster.
Important to note however is that you must clearly indicate that the extra payment is for ‘prepaid principle’, failure to which the money will be treated as an advance payment of the next month’s mortgage payment, and you won’t have paid off the mortgage loan any faster.