Easy Ways to Repay Your Mortgage Early
In these days of uncertain financial futures, there is nothing more that some people would like to do than to get rid of all their debts, with credit cards and home mortgages being at the top of the list. There are ways that you can get rid of that mortgage earlier than its term.
One good way is to take off a large chunk and make prepayments on the mortgage. How can you do this? Do you receive a year-end bonus? Don't automatically think of where you'll be going shopping, you already know where. Send this check straight to your lending institution with a note stating "partial prepayment" with your usual mortgage payment check. This yearly extra payment would actually be about equal to paying off the loan in a biweekly schedule.
Can you pay more than what the institution is asking for? Then increase the monthly payments to a comfortable degree. Be sure to check first if you need to make an extra check for your extra payment. Adding about 10% of the required amount would be paying off your debt faster than if you paid twice a month. After all, the money will go toward the interest and the principal, rather than just the interest to begin with.
Why not create a prepayment account? It's easiest if you pay for your mortgage through your bank and your account can automatically pay for your mortgage. While you deposit the monthly amount required, add in half a monthly payment every 15th and 30th. This constitutes an extra month's payment squirreled away. At the year's end, write out a check marked `partial prepayment` and send it straight to your lending institution.
While you do need discipline to do this, the reward of an early loss of debt is worth it.