For generations, homeowners would buy a home for life. Working over the years to make the payments and celebrating the end of the 30 year mortgage were great milestones in the family. Today, few home buyers expect to be in their home for longer than 7 years on average. Paying off a 30 year mortgage seems like an impossible task. Fortunately, there are great ways to pay off your loan which do not involve time. Here are a few tips for paying off your mortgage loan faster:
- Biweekly Payments – Work with your lender to determine how they handle biweekly payments. If processed immediately, you can save 8 years of payments on a 30 year loan.
- Extra Payments – By making just one extra payment each year, you can pay off your loan 11 years earlier.
- Refinance to 15 years – There are great interest rates available for mortgage loans. Consider a 15 year mortgage.
- Principal Reduction – Watch for ways to add to your monthly payment a little at a time. When possible, increase the principal payment you make.
Paying off your mortgage builds wealth. Consider your life goals, including retirement. A 30 year loan taken out at 37 years old will not be complete until 67 retirement age. The loan needs to be part of the overall financial plan from the beginning and making payoff a priority with a few simple steps can add up to huge savings in interest which can then be used for better investments.