How to Pay Off Your Home Mortgage Early?

If you’re like most people, your home is your largest investment. And if you’ve taken out a mortgage to finance the purchase, you’re probably looking for ways to pay it off as quickly as possible. There are a number of strategies you can use to pay off your home mortgage early. Some may work better for you than others, depending on your financial situation. But all of them can save you money in interest charges and help you become mortgage-free sooner.

Make biweekly payments:

Making biweekly payments instead of monthly payments can save you a lot of money in interest charges and help you pay off your mortgage sooner. With a biweekly payment plan, you make 26 half-payments each year. The extra payment goes toward the principal, which reduces the amount of interest you’ll pay over the life of the loan.

Extra payments:

If you can afford it, making extra payments toward your mortgage principal is a great way to reduce the amount of interest you’ll pay and pay off your loan faster. Most lenders will allow you to make additional payments toward your principal without penalty. You can even arrange to have your extra payments applied to your principal automatically each month.

Refinance to a shorter-term loan:

If you’ve been making timely payments on your 30-year mortgage for several years, you may have built up enough equity to refinance to a shorter-term loan. Doing so will not only save you money in interest charges, but it will also help you pay off your mortgage sooner.

Make a lump-sum payment:

If you come into some extra money, such as a bonus at work or a tax refund, you can apply it toward your mortgage principal. Making a lump-sum payment will reduce the amount of interest you’ll pay and help you pay off your mortgage sooner.

Use a home equity line of credit:

If you have equity in your home, you can use it to pay off your mortgages faster. One way to do this is to take out a home equity line of credit (HELOC) and use the funds to make extra payments toward your mortgage principal. You’ll still need to make monthly payments on the HELOC, but the interest rate will be lower than the rate on your mortgage.

Sell your home and downsize:

If you’re retired or otherwise don’t need a large home, selling your home and downsizing can free up enough cash to pay off your mortgage. This may not be an option for everyone, but it’s worth considering if you don’t need a lot of living space.

Conclusion:

When looking to pay off your home mortgage early, there are a few things you can do. You can make extra payments each month, make a lump sum payment, or refinance your mortgage to a shorter term. All of these methods will help you save money on interest and pay off your mortgage early.