You can always maintain proper financial stability if you can manage to pay off your entire mortgage much earlier than the agreed terms. By making early payments, you can save lots of money that you would have paid by accruing long term interest.
In this post, we shall provide you a few tips on how you can pay off all your mortgage faster to your Seattle mortgage company who must have helped you by providing the necessary finance when you bought your property.
Table of Contents
Refinance Your Mortgage
Whenever interest rates decline, then you can reduce the amount that you pay toward the interest by refinancing your mortgage. Besides that, you can also prefer to reduce significantly your loan term.
By refinancing you can always lower your interest rate and that may offer you lots of savings.
Make Extra Mortgage Payments
One more way, you can also save your money on your interest by reducing the term of your loan just by paying an extra amount of money. However, you must confirm from your lender that he will not charge you any penalty for making extra payments.
Make At Least One Extra Mortgage Payment During Each Year
By making an extra amount of mortgage payment during each year can reduce your term of the loan significantly. If you receive any money as a tax refund or also bonus money, you can use it for this strategy.
Round Up Your Mortgage Payments
By rounding up too, you can significantly help to reduce the term of your mortgage. While you are budgeting for your next payment for your mortgage, you can simply round it up to your next highest figure i.e. $100 amount.
You may prefer to pay $800 instead of just $743 or S900 instead of the amount of $860.
Use Unexpected Income
Send any kind of unexpected payment that you may get due to any reason straight to the mortgage company. This may include any unexpected holiday bonuses, appreciation money was given by your company for a certain achievement, and credit card rewards, etc. by using all such money will never upset your regular monthly budget.
Recast Your Mortgage
If you get any money due to inheritance or any other windfall, then you must consider recasting your mortgage. Few loan service providers offer this option when you make a lump sum payment toward your principal.
With recasting, your mortgage company will re-amortize your loan so your term will remain the same, but your monthly payment will be lowered based on your reduced principal.
Select A Flexible Term Mortgage
Most common mortgages are 15-year and 30-year, but they may not be the only options available. You may consider reducing your amortization term.
While choosing your refinance, request your lender to offer you a flexible term mortgages. Choosing shorter terms will mean less money to be paid as interest over some time.
Consider Using An Adjustable-Rate Mortgage
Many of you may not prefer this route due to their checkered history. However, if you are financially stable then you can consider it.