How to Pay Down Your Mortgage Faster
Posted on March 5th, 2009 by Marck
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Many people are stuck with a long-term mortgage that seems to be impossible to pay off. Mortgage payments can eat up your savings and income, putting you on an even more dire financial situation than when you first took out a mortgage. Here are some ways that you can pay off your debt faster and easier.
Pay On Time
Often it is not the net sum of the mortgage that eats into your finances, but the interest and other dues that come with missed payments. Some people may forget that they’re paying a mortgage, and receive a notice that they’re behind a couple of payments plus interest and other dues. If you miss too many payments on your mortgage, you may end up with a very substantial amount of money owed in interest and back dues. Always keep track of when you pay dues and advances.
Follow Interest With Interest
Keep in mind that the interest rate of a mortgage - especially for real estate - changes frequently. Don’t be shocked or surprised if you pay high interest for one payment, and then pay a lower interest for the next payment. Keep abreast of interest rates for mortgages and other debts by reading up on the business section of the newspaper, or through live interest rate updates on the Internet.
Make Small Advanced Payments
Small advanced payments made every month can help offset the total annual cost of the mortgage. If you pay a small fraction of a month’s payment every month for a year, you can pay off the mortgage in ten or eleven months. Advanced payments also make it more convenient for the lender to keep track of your payments, because the advanced dues cut one month off the timeline of the mortgage.
Pay Annual Lump Sums
If you receive an inheritance, a large bonus, a big cash gift, or if you win a substantial cash prize, you may want to pay off part of your mortgage with the financial windfall. A lump sum works to your advantage because you do not pay compounded interest values, and that the interest for the payment is not a sum accumulated over a span of payment schedules. Once you pay the lump sum, you pay a single interest, and you cancel out a few months or so of the payment schedule and due dates.
Mortgage payments do not have to be a financial burden that you’re doomed to bear the rest of your life. With these tips, you can easily pay off the debt, and make your home or property truly your own.
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