Saving thousands of dollars and shaving years off a mortgage is easier than you think. Follow these tips below and if you have any questions, please feel free to call me so I can explain.
#1) Increase the frequency of your payments
If you're paying your mortgage on a monthly basis, you can arrange to switch your payments to half of the monthly payment amount on a bi-weekly basis. As a result, you'll actually make 26 payments a year.Most homeowners don't miss the extra amount they pay but always notice the savings that add up from this simple strategy.
#2) Take advantage of increased payment options
Most lenders allow allow a certain percentage increase to your monthly or bi-weekly payments throughout the term of the mortgage. The additional amount you pay goes straight to principal and it is not that difficult to make the adjustment in your lifestyle to afford the extra amount.
#3) Take advantage of lump-sum payments
In addition to increased payment options, most lenders offer the opportunity to make lump-sum payments on a mortgage. Annual bonuses or tax refunds provide a great opportunity to take advantage of this option. An annual lump-sum payment of just 2% is all it takes for many homeowners to pay off their mortgage years ahead of schedule.
#4) Take a shorter amortization
In addition to the strategies listed above, some home buyers choose to shorten their amortization period from the industry-standard 25 years to 10, 15 or 20 years instead. The result is slightly higher mortgage payments but significant interest savings over time.
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