3 Tips To Help You Pay Off Your Home Loan Sooner

views

For most people, the most debt they’ll ever be in in their life will be right after they purchase a home. Even if you were able to put down a decent down payment, you still will likely owe your lender tens of thousands, if not hundreds of thousands, of dollars. 

However, getting out from under this debt and retaining full ownership of this home all on your own isn’t easy. But with the right plans in place, you can find ways to shave off years from your repayment period as well as thousands of dollars in savings. To help you see how this can be done, here are three tips to help you pay off your home loan sooner. 

Save For Four Extra Payments Each Year

While you’ll be paying your mortgage every month, one way you can get through these payments even faster is to add in some extra payments throughout the year. While this might be a stretch for those who already have a tight belt financially, most people can put into place a savings plan that will allow them to pay at least one extra payment per year, which can really add up.

If you’re able to, DaveRamsey.com shares that you should shoot for paying an extra mortgage payment each quarter, which will come out to four extra payments per year. If you’re able to do this, you could pay off your home loan about 11 years sooner than you otherwise would have been able to. And with this early payment, you could save about $65,000 in interest over the life of your loan. 

Choose A Loan With An Offset Account

To get your home loan paid off sooner, what you really want to do is pay down the principle of your loan as fast as possible.

One way you may be able to do this is to choose a loan with an offset account attached to it. According to Mark Bristow, a contributor to LifeHacker, with an offset account, any money that you put into that account acts as if it’s being taken off of your mortgage for interest purposes. So if you owed $200,000 on your mortgage but had $60,000 in your offset account, you’d only be paying interest on $140,000 instead of the whole $200,000. Under the right circumstances, this could save you a lot of money and help you pay your loan off faster. 

Consider Refinancing Or Recasting Your Mortgage

Another option you might want to consider for paying off your loan fast, according to Maryalene LaPonsie, a contributor to U.S. News and World Report, is to refinance or recast your mortgage when the timing is right. Both of these options could give you much better terms for your home loan. 

If you’re wanting to pay off your home loan as soon as possible, consider using the tips mentioned above to help you find ways of accomplishing this.

Share this
Tags

Must-read

What Is the Difference Between Beer and Ale?

When exploring different types of beer, you might wonder what makes an ale unique. The difference lies in the yeast used and the brewing temperatures. Ales use top-fermenting yeast and are brewed at warmer temperatures, giving them a fruity and complex flavor. On the other hand, lagers use bottom-fermenting yeast and are brewed at cooler temperatures, resulting in a...

What Is the Difference Between Beer and Malt Liquor?

The ingredients and brewing processes are key differences between beer and malt liquor. Beer is made with water, malted barley, hops, and yeast, aiming for a balanced and complex flavor. Malt liquor often uses extra ingredients like corn or rice to boost its alcohol content, resulting in a sweeter taste. It also usually comes in larger containers, leading to...

How Long Does Canned Beer Stay Good For?

When it comes to enjoying a refreshing beverage, many turn to the convenience of canned beer. Whether it's for a backyard barbecue, a camping trip, or simply unwinding after a long day, canned beer offers portability and freshness.  Factors Affecting Shelf Life Several factors impact the shelf life of canned beer, including storage conditions, beer style, and alcohol content. Generally, canned...

Recent articles

More like this