3 Easy Ways to Pay of Your Mortgage Early
If you aren’t careful, paying off your mortgage can be as daunting as getting approved for one. The burden can be overwhelming, especially when you have other debts, bills and business expenses to cover.
Fortunately, there are things you can do to ensure your mortgage loan is cleared some months or years prior. Remember, the benefits of completing your mortgage payment early are quite tremendous; from cutting back on interest costs, to focusing your finances on other essential investments.
Make an extra principal payment
Some mortgage lenders allow their clients to finish paying their debt before schedule, but others don’t. Therefore, you must first consult your bank to be sure they don’t restrict borrowers from completing their loan payments early.
That extra cash you add on your monthly payments can easily shave off a year or two from your scheduled mortgage payment period, notes American Loans. Besides, it can help you get the best mortgage rates in Salt Lake City.
Only borrow what you can afford
Before you even think of buying a new home, think of your financial situation. Evaluate your income-to-debt ratio. You must be sure that you can comfortably make monthly mortgage payments alongside other debts you may have.
It even becomes much easier when you have at least ten percent set aside for the down payment. This way, you can juggle around with other income sources and channel some funds to your mortgage as extra payments.
Make one extra huge payment a year
This is especially possible for people who run other businesses. Of course, your ventures won’t make huge profits every other time. However, there is always that particular season of the year that you will realize lucrative gains.
Many would feel it wise to invest in other profit-making opportunities. But think of the financial freedom you will have when you first settled your debt payments. Besides, your new business is likely to add extra weight on an already overwhelming budget of expenses.
Saving a substantial amount worth an investment as massive as a house purchase can be daunting, given the number of years you may take to attain the threshold. This is where lenders come in handy. However, you must be careful not to pile up debts that you can’t manage.