5 Ways that Simple Payment Strategies Can Reduce a 30-Year Mortgage
by Dan Wolf
on Monday, November 3rd, 2014 at 10:27am.
The idea that you will be living in the same home after 30 years seems a bit, well, odd these days. But paying off a 30-year mortgage does happen more than you think, even if it doesn't take the entire loan term to do it. But how do people do it? Simple!
Here are 5 great ways of reducing your mortgage.
1. Never just pay the minimum. You've obviously heard this one before when related to credit cards. So what's the difference? Not much. Every payment that you make, add a little extra. In some cases, if you add even $100 to your monthly minimum, you can pay your home off in half the time.
2. Consider bi-weekly payments. If you can afford it. This can be done in one of two ways. You can set it up yourself, and simply make the payments on your own, keeping track as you go. Or you can set it up with your lender. Either way, you'll be making a full extra year's payment each year that this plan is in place.
3. Pay when you have extra money. Paying down your mortgage doesn't have to a planned affair. Many lenders will be more than happy to accept payment whenever you would like to send them extra money. There's no harm in throwing some "bonus" money there way when you have it to really shed those mortgage years off.
4. Refinance to a lower rate and continue regular payments. Seems simple, but it is so often overlooked as an option. The amount you save in interest, if you continue to make your previously agreed upon payments, will really cut your mortgage down.
5. Refinance to change loan terms. Even simpler (though not as drastic in terms of loan amounts), is to negotiate a refinance to reduce the loan terms completely. In doing so, you will cut your interest rates, be out of your mortgage sooner, and be free of any limits you were previously held to.
In the end, the ultimate goal is to remove ownership from the bank, and place it firmly in your hand. So if your goal is to finally own your own home, employing a few simple tricks can really move the process along.
For more information on how we can help you, please don't hesitate to contact us any time at 907-248-9653 or visit us online at www.anchorgehomesearch.com.