06 Mar Tips to pay your mortgage off faster
When it comes to loans, a mortgage might be the biggest one an individual will ever have. Thus, it makes sense to hear people say they want to save money on interest, pay the mortgage faster, as well as avoid penalties in case one decided to sell the current house and move on to a different one. Whatever the case may be, the ultimate goal is to pay the mortgage sooner rather than later.
Using a mortgage broker should be your first step as they will get you lower interest rates. However, and this is our core value at The Costa Group as every client is treated as a family member, a broker will also provide you with tips that will allow you to save money and work faster towards your goal.
One strategy that can be very useful for any homeowner currently paying a mortgage is to consider biweekly payments. Instead of making your mortgage payment once a month, you may want to consider making two payments in a month. What is the advantage of that? You pay the same amount per month, but you will be reducing the amount of interest you pay. How, you only pay interest on half of your monthly payment.
Another way of making this process a bit faster is to increase your mortgage payment amount. Now, we understand that not everyone can do this. Many variables play into this process. You should know that mortgages usually include some percentage of prepayment benefits which enable you to pay your mortgage back faster. If you are able to do so, you can increase your monthly payments between ten and twenty per cent. However, make sure you understand that once you have increased this amount, you cannot go back to its original form – that will be your payment for the reminder of your mortgage term.
When you are renewing or refinancing your mortgage, you can also shorten the amortization (see our previous post on this topic). Last, but definitely not least, you can also increase the frequency of your payments by making a lump sum payment, which will also save you a great deal of money in interest.
You can always follow us on our social media platforms, watch our YouTube channel or contact us for more information.