It can be a challenging task to pay your mortgage loan speedily. This is because there are things that will block your way of payment. Paying your mortgage days prior to its due date will not make you pay less interest. If you pay your loan late but still in the two-week grace period, you will still incur the same interest. Loan payments on most mortgages are calculated at one time as if they were paid on the first day of the month. Here are ways on paying your mortgage faster.
Bear in mind to pay the mortgage just once in 30 days. The purpose is to use the payment receipt every time you pay the loan at an amount higher than the minimum disbursement you make.
When paying your mortgage, show the bank your receipt and tell the collecting agent that the extra amounts shall be applied to the principal. If you fail to do this, the bank would hold the extra funds and use it to your next payment. Your mortgage balance shall continuously accumulate interest thus it seems like you did not make the added principal payment.
If you make your payment via the internet, do not pay more than the minimum payment. Keep the payment receipt and then pay the principal with your extra payment. Make a separate check for your additional payment and send this via mail to the bank. This will lower the amount of your principal. Again make the bank understand that this amount is for the principal as they may hold these funds and add it to your monthly payments.
Another way to pay off your mortgage quickly is to refinance your mortgage so as to minimize your loan term. This is ideal when interest rates are declining. This is especially helpful in an environment where interest rates are falling. Go online and look for ways on refinancing a mortgage. If you refinance, know the closing fees and costs involved in this process.
If you do not want to refinance your mortgage, you can devise a plan that would make you pay extra on your loan’s principle amount. This will minimize the time it would take in paying your loan. This requires both budgeting and careful planning. You will have to determine the amount you will shell out as extra. This can be as small as $25 per month.
If possible, pay additional lump sum remunerations every now and then so as to pay off your mortgage loan faster. Try to raise funds such as having a garage sale, working overtime, getting sideline jobs, selling things you do not need online at auction sites or recycling aluminum cans. Find ways to earn extra income so as to pay off your loan’s principal amount.
You will need to sacrifice a lot of thing in the present to pay off your mortgage loan quickly. However, it would be rewarding to be relieved of anymore payments in the future. With these tips, you would be loan-free later on.