Buying a home is one of the biggest purchases you can make. Paying off your mortgage may be extremely intimidating as it sometimes takes many many years. A Waltham Realtor is here to give you tips on how to pay your mortgage off in less time while not breaking the bank. Paying off your mortgage sooner than later will also help increase your equity and save you a lot of money in interest payments.
1. Switch To A Biweekly Payment
Start making your mortgage payments every other week instead of once a month. However, this doesn’t mean paying the full amount twice a month. If your mortgage payment is $1000 a month, pay $500 every two weeks. Paying your mortgage on this schedule can greatly benefit your wallet for a few reasons. These extra payments will basically have the same impact on your bank account as if you were paying once a month. However, because there are 52 weeks in a year, the biweekly payment will result in 13 as opposed to 12 full payments a year. This will result in paying a whole extra payment each year, greatly reducing the amount of time it will take you to pay it completely off. Waltham Real Estate Agents suggest this method as it will also help you save thousands of dollars in interest.
2. Make Extra Principal Payments
Mortgage lenders usually allow people to make extra principal payments each month. This means that the extra payment will go towards paying down the principal amount rather than both the principal and interest amount. Paying a little extra in principal payments each month will greatly reduce the interest charges over time as well as shaving years off your mortgage payment. Waltham Realtors suggest rounding your monthly payments up to pay your principal payment. For example, if you have a mortgage payment of $1,065 per month, you would pay $1100 per month and dedicate that extra $35 as a payment on the principal. While it may not seem like a lot, over time these extra small payments will add up.
3. Refinance Into A Shorter-Term Loan
This option is sometimes tricky for people as some only make enough money to pay a certain amount a month in mortgage payments. However, if you have a little extra money to spend on mortgage payments each month, this is an extremely great option for you. Waltham Real Estate Agents have mentioned that a shorter-term loan will result in saving thousands of dollars in interest payments! If you have a 25-year mortgage, consider refinancing to a 15-year mortgage. This will not only shave 10 years off of your mortgage payments but your interest rate will be much lower. While you’ll be paying a little extra monthly, you will make up for it in the end.
4. Put Your Extra Money Into Your Mortgage
If paying off your mortgage early is something you are very dedicated to, Waltham Realtors say to consider using the extra money you get throughout the year to pay off your mortgage. These extra payments may come from your tax return, a bonus from work, an increase in salary, selling things you no longer need, etc. Because you are already living without that extra money, putting it towards your mortgage is a great way to pay it off faster while not hurting your bank account.
Contact A Waltham Realtor Today
Waltham Real Estate Agents always have your best interest in mind when helping you budget for a mortgage payment. They will bring forth their professional and experienced knowledge to help you create the perfect mortgage plan that will help you pay it off as quickly as possible while not breaking the bank. Waltham Realtors are also dedicated to getting you the best deal whether you are buying or selling a Waltham home. Contact Hans Bring today for assistance!