If you’ve been dreaming of escaping your mortgage, I have good news: You can make it happen. I used these five strategies to pay off my house early and free myself from debt — and now I’m going to share them with you.
Calculate Your Prepayment Savings
Once you know your prepayment savings, you can use that information to pay off your mortgage early! The most common way is to make a lump sum payment. If you have the cash available, this is a simple way to get rid of debt. You simply write a check to your lender and they will apply it against whatever outstanding balance you have on your loan.
Make an Extra Monthly Payment
You can also make an extra payment on your mortgage at the beginning or end of each month. If you make one extra payment per year, you will save approximately $1,000 in interest over the life of your loan. You can do this by making a complete payment in addition to your regular monthly payments, or by paying off half of your monthly balance and then starting up again with another partial payment. If this is what appeals to you, then make sure that everything is in order before making any adjustments to your current schedule so that nothing goes wrong during this process.
Round up Your Payments
Rounding up your payments can help you pay off your mortgage early. If you’re already making full monthly payments, this might not be the best method for you. But if you’re paying more than the minimum payment, then rounding up can make a huge difference in how quickly you pay off your mortgage.
Set up Automatic Biweekly Payments
Another way to save money is by setting up automatic biweekly payments. Instead of paying your mortgage once a month, you can set it up so that you pay half the amount each week. This will ensure that you are always keeping your home paid off and ahead of schedule.
Another option is to open a savings account and make sure there are no withdrawals or transfers made from it unless it’s for an emergency situation. You can also set up a budget and stick to it!
Put All Extra Money Toward the Mortgage
If you have any extra money, put it toward your mortgage. That could mean using a tax refund, bonus, raise or inheritance toward the mortgage. Or, if your child has birthday or holiday money they want to spend on something else (a new toy), ask them to give it to you instead. You can use that money as an opportunity to pay down your mortgage and get a jump start on paying off the loan early.
Alternatively, you can also choose refinancing. Let’s say you have a home loan to repay but there’s already too much on your plate. In that case, home loan refinance is the best option for you to repay your loan at the earliest. In fact, experts at SoFi point out, “ refinancing could help you save money over the lifetime of your mortgage. You could get a shorter term, lower monthly payments, or get a cash out refinance loan on your home’s equity.”
Remember, it’s all about saving money. If you’re able to put more into your mortgage, then you can save more on interest payments and pay off your home loan sooner. These tips are just a few ways to do that, but there are plenty of others out there!