- Change the schedule of payment: You must have been making a single monthly payment in a particular month but if you want to pay off your mortgage sooner and if you’re a first-time homebuyer, you should change the repayment schedule of the mortgage loan. Instead of making a single payment in a month, you can certainly make bi-weekly mortgage payments and plan 2 payments in a single month. This way you can knock off some of the loan term and also repay the mortgage earlier and own your home right away.
- Add money to the single payment that you make: Instead of making bi-weekly payments in a single month, you can even add a fixed amount of money to the scheduled monthly payments so that you can reduce the principal amount of the mortgage loan sooner. You can start building more equity and thereby pay back your mortgage loan in less than 30 years. You might plan to pay $200-300 extra each month.
- Pay a lump sum amount annually: You can even pay a lump sum amount of money at the end of the month if you find it difficult to squeeze extra money towards the monthly mortgage installments apart from the scheduled monthly payments. You have to maintain a mortgage fund where you can keep on depositing money as and when possible so that you can easily pay off that big amount at the end of the year and thereby repay the principal amount.
- Refinance into a short term loan: When you’re a first time home buyer, you can even choose the option of refinancing into a shorter term loan. Take out yet another home mortgage loan that carries a lower term than what you presently have. With this loan, you can repay your home loan faster by paying bigger monthly mortgage installments. The payments may be bigger but you can at least reap the benefits of owning your home. If you’re planning home renovations, you should steer clear of unsecured home improvement loans. You can click here for reasons why you shouldn’t use unsecured home improvement loans.
So, if you’re trying to look for ways through which you can repay your mortgage loan sooner, you can take the above-mentioned steps. Before taking the plunge, ensure checking the mortgage loan document so that you don’t have to pay pre-payment penalty fees. You should only pay back the loan earlier if you’re not charged any extra fees. If you are looking at this article before you have even decided on your loan, you may be in the planning stages and looking around to see how the coming years will be with a mortgage. If you are unsure of which mortgage to get, you may need a specific mortgage depending on your situation, if so, have a look around and keep doing thorough research before settling on one.