How Will You Pay Your Mortgage Finances
For most people, being able to pay off mortgages is nothing less of a dream come true. Everyone wants to lead a ‘debt-free’ life. No matter how hard it seems, it is in fact very much possible. In this article, we will teach you how you can swiftly pay your mortgage finances off. Here they are:
Making Extra Payments: Two Methods
Want to know the easiest way to rapidly pay off your mortgage? We are gonna give you two methods.
In the first method, split your monthly payment related to your mortgage in half. Now go ahead and make payments in the bi-weekly fashion. What this will help you accomplish is making 13 months of mortgage payments. Also, another bonus point is the fact that you won’t even notice it in your monthly budget. Amazing isn’t it? However, to be able to do this, first consult with your lender. If they accept bi-weekly payments only then you can go ahead with it.
In this second method, every month pay a little extra to gradually pay off the principal. This will ensure you shave off a lot of money from your loan. This one is quite simple but we guarantee you it works. This also happens to be a more effective strategy than refinancing.
Mortgage Refinancing
Refinancing your mortgage is another very good strategy. However, refinancing only makes sense if you happened to get a lower interest rate. When opting for this option, you have to keep in mind the fees related to refinancing. Therefore, make sure that the cost of refinancing is canceled out by savings. Also, another bonus tip is to refinance into a short-term loan. This will help you significantly bring down the interest rate and help you speedily pay off your mortgage.
Mortgage Recasting
Mortgage recasting is way different than mortgage refinancing. In this method, you can just pay a lump-sum amount to pay off your principal. This, in turn, will result in a loan term that is shorted. This is because the bank will adjust the amortization schedule and show you the new balance. If asked why recasting is better than refinancing it is because the fees involved are very low. However, if you have a high-interest rate, then you are probably better off sticking to refinancing itself.
Payment In Lump-Sum Towards Principal
This is a very good alternative option against recasting. However, it is not for everybody. Making payments in lump-sum works only if you have got a large pile of cash saved up. Maybe you just received a large bonus or recently inherited some money? You can very well use this money to pay off your mortgage principal. You can also choose to auction your unnecessary things or sell them off. That helps as well. The benefit of this is saving the bank fee that is associated with recasting and refinancing.
This brings us to the end of the crash course on how to pay your mortgage finances off. I hope you can now go ahead and take the first step towards a debt-free life. Also, share with us any other tactic that we might have missed out on.
