Ways Of Paying Off Your Mortgage Loan Early
In this blog, we will discuss ways of paying off your mortgage early. Most mortgage borrowers have 30 year fixed rate mortgage loans. 30 years is a lot of time to be stuck with a payment obligation and a lot of interest expense that mortgage borrowers will end up paying. Mortgage interest expenses will be more than the principal amount of a home mortgage. There are tips and ways of paying off your mortgage loan early.
Make Timely Mortgage Payments
All residential mortgage loans have no prepayment penalties. One way of saving a lot of money in mortgage interest expenses and paying off your mortgage loan early is by making extra payments besides the minimum monthly mortgage loan amount due.
Extra Mortgage Payment Goes To Reduce Loan Balance
The additional payment pays down the principal amount of the mortgage. Just by making an additional $200.00 monthly payment towards a principal reduction on a $400,000 mortgage loan with a 4.0% 30 year fixed rate will reduce the 30-year payment to 25 years. This will save you 5 years in paying off your mortgage loan early.
Make Bi-Weekly Payments Is Way Of Paying Off Your Mortgage Loan Early
Another way of paying off your mortgage loan early is by making biweekly mortgage loan payments. By making bi-weekly mortgage loan payments, homeowners are ahead by an extra month of paying the mortgage by the end of the year. Getting in the habit of making bi-weekly mortgage payments will reduce the term of the 30-year mortgage loan.
Benefits of Getting Into Habit of Making Bi-Weekly Payments
For borrowers who get into a regiment in making biweekly mortgage payments, their new mortgage loan term will be 25.8 years on a $400,000 mortgage loan with a 4.0% mortgage rate on an original 30 year fixed rate mortgage loan. Making bi-weekly mortgage payments will help to pay off your mortgage loan early by almost 5 years. This means thousands of dollars in mortgage interest expense savings.
Choosing Shorter Term
Another option in paying off your mortgage loan early is by getting a shorter amortized mortgage loan. Getting a shorter-term mortgage loan will increase the minimum monthly mortgage payment obligations. If mortgage borrowers can afford the extra payment, it can save tens of thousands of dollars over the life of the mortgage loans. This will help in paying off your mortgage loan early. There is 25-year, 20-year, 15-year, and 10-year fixed-rate mortgage loan programs. Homeowners with any questions on the types of mortgage loan programs that are available please contact us at Capital Lending Network, Inc. at 262-716-8151. Or email us at email@example.com.
Pay Down With Lump Sums
Homeowners who have additional cash that is sitting in a bank account not earning any interest income may consider paying down mortgage loan. Making one lump payment will pay down the principal. There will be no interest charged on principal pay down. Paying down the principal will save homeowners in mortgage interest expenses. Remember by doing this, the monthly payment will still stay the same unless they refinance and restructure the mortgage loan.
Refinance Current Mortgage Loan
Monitor the current mortgage rates. Homeowners should consider if refinancing their mortgage loans can reduce their monthly housing payments. Refinancing to a lower mortgage interest rate can save homeowners tens of thousands of dollars in mortgage interest expense over the life of the mortgage loan. Mortgage borrowers who need to explore the idea of refinancing or qualifying for a home loan, please contact us at Capital Lending Network for a free, no-obligation, consultation at 1-262-716-8151 or text us for a faster response.