5 Tips to Becoming Mortgage Free
Mortgage Free Tips
Purchasing a home is one of the largest investment most people make. And working towards paying off your mortgage may see slow but there are a number of ways to help pay your mortgage off quicker and become mortgage free.
The first step to becoming mortgage free starts before you purchase your home, its important to shop around and get the best rate possible with the right options for you.
Here are 5 tips to help you become mortgage free:
1. Match Payments to Your Pay Periods
Lining up your mortgage payment with your pay period for work will make it easier to budget. Plus if you get paid every bi-weekly or weekly you’ll be making extra payments each year.
2. Shorten Your Amortization Period
The amortization period is the length of time it will take to pay off your entire mortgage. Typically this is 25 years for a lot of people, some may be shorter or longer depending on your circumstances. If you can budget for a higher monthly payment and shorten your amortization period, even by 5 years, it will help you pay offer your mortgage quicker.
3. Increase Mortgage Payments
One option commonly found with mortgages is the ability to increase your mortgage payment. Each mortgage is different but typically you can permanently increase your mortgage payment by 10% to 20%. Over the course of your mortgage this increase will help you pay off your mortgage quick and may shave years off the total length of your mortgage.
4. Lump Sum Payment
Most mortgages come with the option to make one lump sum payment on your mortgage once a years. Typically, you’re allowed to put up to 10% to 20% down as a lump sum, but keep in mind this depends on your mortgage. A quick call to your mortgage company will give you the info you need. And even if you don’t have a large sum to put down, a small payment once a year will help you pay off your mortgage quicker. Every little bit counts.
5. Shop Around When Your Mortgage Renews
When it comes time to renew your mortgage and get a new rate, its important to shop around. It may seem easy to sign the form the bank sends you to renew but you may be able to find a lower rate if you look around or talk to your mortgage professional. If you can find a better rate but you’re happy with your mortgage company its worth contacting them to see if they will match the better rate you’ve found. Ensuring you have a competitive rate when you renew your mortgage can save you thousands of dollars and help you pay off your mortgage faster.
These tips are some of the ways you can help pay your mortgage off quicker and become mortgage free. I hope these tips help you on your way to becoming mortgage free!