While paying off a mortgage early might seem daunting, there are some simple strategies you can use to make it happen. With the right planning and financial know-how, you’ll be able to pay off your home loan before the term limit – and save money while doing so.
Refinancing
Refinancing is a popular option for homeowners who want to pay off their loans early. If your budget can afford higher monthly payments, you could refinance a 30-year mortgage into a 15-year mortgage. While you’ll pay more every month, you’ll save thousands of dollars in interest.
Making extra payments
Another option is to make extra payments. You could double your auto-pay amounts each month, or set up automatic bill pay through your bank to transfer funds to your lender.
Switching to bi-weekly payments
Another strategy for early payoff is to switch to making bi-weekly payments instead of monthly. With bi-weekly payments, you pay off half the monthly payment amount every two weeks. This turns your 12 monthly payments into 26 bi-weekly payments, and gives you the opportunity to pay for an extra month.
Just by adding this extra month’s worth of payments, you can save thousands of dollars in interest while also paying off your mortgage early.
These are only a few ways you can pay off your mortgage early. While every lender is different, there are usually options available for adjusting your payment schedule to get ahead. Consult your mortgage provider for more information about your available options.