September 11, 2019
September 11, 2019
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Paying down your mortgage is a huge accomplishment for you and your family, and it’s a very important aspect of your financial independence. Moreover, it’s quite easy to cut years or even decades off the payment schedule, increasing your equity and saving your money in interest payments.
Does that sound like an uphill battle that you can’t win? Follow these 4 expert tips to pay your mortgage off within a decade.
“Each time you pay extra on your mortgage, more of each payment after that is applied to your principal balance,” says best-selling author and radio host Dave Ramsey.
Before using this tip, let’s go over the ground rules.
*Check out our mortgage calculator to estimate how quickly you can pay off your home.
Took a 20-year mortgage? Shorten it to a 12-year loan will blast you through that mortgage faster, and, will get you a better interest rate as well (short-term loans are typically paired with lower interest rates).
So, the payments on a 12-year loan are not double the payments of a 20-year loan; they’re significantly less. Check out mortgage rates to see how much you’d have to pay to do a 12-year refinance.
Downsizing your house could be a pretty drastic decision, but if your goal is getting rid of your mortgage, consider selling your larger home and using the profits to buy a smaller, less expensive home.
Then, you can use the money from selling your bigger house on paying cash for your new home. Even if you have to take a small mortgage, you’ve succeeded in decreasing your debt. Now your goal is to pay off that debt as quickly as possible. The smaller the balance, the quicker you will make it happen.
Be financially ready and know that you can afford the house you want to buy before you search for homes. Here is a simple checklist where you can start. Put your home purchase on hold, if you say no to any of these questions.
If you need any assistance related to this question our experts are ready to provide you with more information.
If you take advantage of the following tips before you purchase your next home, you will be in a great position to pay that mortgage off early.