Ignite FB Tracking Pixel3 Ways to Pay Off Your Mortgage Early - Olga Rodriguez
Luxe Key Realty, LLC.
Olga Rodriguez, Luxe Key Realty, LLC.Phone: (786) 217-7347
Email: [email protected]
3 Ways to Pay Off Your Mortgage Early

by Olga Rodriguez 02/04/2019

Paying off a mortgage early is a dream of many homeowners. By making larger payments on your home loan, you can cut years off of your loan term and save thousands of dollars in interest payments that you can use toward savings or investments. But in an economy that has seen decades of wage stagnation and increasing costs of living, it can often seem like an unattainable goal.

With some planning and initiative, however, there are ways to pay off your home loan before your term limit.

In today’s post, we’re going to talk about three of the ways you can start paying off your mortgage early to avoid high interest payments and save yourself money along the way.

1. Refinance your mortgage


If you’re considering making larger payments on your mortgage, it might make sense to look at refinancing options. Most Americans take out 30-year, fixed-rate mortgages.

If you can afford to significantly increase your mortgage payments each month, you could refinance to a 15-year mortgage. This will save you on the number of interest payments you’ll have to make over the years. But, it will also help you secure a lower interest rate since shorter term mortgages typically come with lower interest rates.

This option isn’t for everyone. First, refinancing comes with fees you’ll have to pay for upfront. You’ll have to apply for refinancing, get an appraisal of your home, and wait for the decision to be made.

But, you’ll also have to ensure that you can keep up with your higher monthly payments. If your income is variable or undependable, it might not be the safest option to refinance to a shorter term mortgage.

2. Make extra payments

An option that entails less risk than refinancing is to simply increase your monthly payments. If you recently got a raise or are just reallocating funds to try and tackle your mortgage, this is an excellent option.

Depending on your mortgage lender, you may be able to simple increase your auto-pay amounts each month, streamlining the process. Otherwise, it’s possible to set up bill-pay with most banks to automatically transfer funds to your lender.

3. Bi-weekly payments or one extra payment per year

Making bi-weekly instead of monthly payments is an option that many homeowners use to pay off their mortgages early. Bi-weekly payments work by paying half of your monthly payment once every two weeks.

The vast majority of homeowners make 12 monthly payments per year. But by switching to 26 bi-weekly payments, you can effectively make 13 full monthly payments in a year without seeing too much of a difference in your daily budget.

This doesn’t seem like much savings in the short term, but let’s take a look at how much you could save over the term of a 30-year mortgage.

On a 30-year fixed mortgage of $200,000 with a 4.03 annual interest rate, you would make a monthly payment of $958.00 and a bi-weekly payment of $479.

Over 30 years of an extra monthly payment, you could save nearly $20,000 on the total interest amount and pay off your mortgage almost 5 years early.

About the Author

Author
Olga Rodriguez
Olga L. Rodriguez, Realtor I am a customer-service-oriented real estate agent who helps home buyers and sellers in Florida, in the cities of Miami, Kendall, Coral Gables, Hialeah, Palmetto Bay and Miami Beach. If you're looking for an agent with patience, perseverance, and a passion for helping people, you've just found her! My working experience I received my real estate license in 1986. Since that time I have worked in the real estate field both part time and full time. When raising my children I worked as a teacher and part time real estate agent. I have also worked as a real estate paralegal, and appraiser. Working as a teacher I learned the skills of patience, perseverance, and being organized. My paralegal experience allows me to efficiently explain legal documents to my clients. The knowledge that I gained from working as an appraiser allows me accurately price the homes of my sellers and advice my buyers on the price of their purchases. My love for math, negotiating, business and my passion for helping people has led to choose real estate as my preferred profession. As a realtor I can truly say, "I love my job”. What Makes Me Different from Other Agents Service: I strive to exceed my clients' expectations in all aspects of the real estate process by providing excellent customer service and effective negotiating practices. Education: Success in real estate starts with education. You have to understand the nuances of the local market, the dynamics of supply and demand, and how these things affect buyers and sellers. I make sure that my buyers and sellers are well informed at every step of the process, so they can make smart decisions. Contact: Buyers, sellers and renters have a lot of questions during their real estate transaction. I let them know what is happening every step of the way during their real estate transaction. I am available at all times and can be reached by phone, text, or email. A Smoother, Less Stressful Real Estate Experience Buying, selling or renting a home can be exciting, but it can also be stressful. That's why I work extra hard to keep my clients informed, and to make the process as smooth as possible. In my free time I enjoy traveling, visiting new cities, states and countries. I also enjoy swimming, cycling, and boating.