Most people seem to love the idea of having a home of their own, but the length of a typical mortgage is a debt many are not interested in. But building equity is a great financial decision, and when it’s paid off you’ll have an asset that is likely worth a lot more than you paid for it.
If you’re in this group, you don’t have to shy away from mortgages entirely- There are many measures you can take to pay them off quicker.
Find a Great Advisor
Chances are, you are not a mortgage expert and could use great mortgage advice to discover all your available options. The big lenders like major banks are all competing against one another to provide you with the lowest rate, which is great, but they may not provide the best advice.
Keep in mind that the longer you take to pay off your mortgage, the more you’ll pay in interest payments, which is why so many prospective homeowners turn to mortgage brokers to help them out. Wherever you look for advice, make sure they are open to sharing tips with you on how to pay your mortgage off faster before you officially take them on as an advisor.
Focus on the Interest
It’s no secret that the interest you pay over the life of a mortgage is what really adds up and makes the loan undesirable. You may get what appears to be a great mortgage rate, but the interest you’re paying can minimize the amount you’re saving in the long run. These payments are unavoidable, but you can knock down the amount of interest you pay considerably.
Discover Different Strategies
It’s important to look beyond the actual rate and to start adopting strategies to get the mortgage paid off quicker. Naturally, a larger down payment is a big way to do this. If you’re able to pay more than the standard amount, do so. It will result in you having to pay interest on a smaller loan.
Bi-weekly accelerated payments are another way to decrease your interest payments over the entirety of the mortgage. If you paid one dollar extra each day for the life of a 25-year mortgage, you’d save yourself $6,000 in interest and pay off your mortgage about one year sooner.
Singles and Doubles Mentality
To use a baseball analogy, you need more of a singles and doubles mentality instead of trying to hit a home-run with an out-of-this-world interest rate. Just chipping away with small changes and payments can make a huge difference over time, save you a lot of money and get your mortgage paid off in less time.