Michael Bock

Mortgage Loan Originator

  • Home
  • About
    • About Us
    • Privacy Policy
  • Blog
  • Resources
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage FAQ
    • Mortgage Glossary
  • Reviews
    • Read Reviews
    • Leave a Review
  • Contact

How To Pay Off Your Mortgage Early: 4 Methods That Work

May 13, 2020 by Michael Bock

How To Pay Off Your Mortgage Early 4 Methods That WorkWhile a mortgage is a necessity for many people who have the dream of owning a home, it is also a form of debt. Most people do not like owing money to someone else. Therefore, homeowners might be looking for ways to pay off their mortgage early. The reality is that people are charged interest for having a mortgage. If a mortgage is paid off early, this is less money than the bank will take and more money in the pockets of homeowners.

There are a few methods people can use to pay off their mortgage early.

Make Extra Payments

At the beginning of a mortgage, the vast majority of the money that people send the bank goes toward interest. In the end, most of the payment covers the principle of the loan. If someone is willing to make extra payments, these added payments are going to directly attack the principle. When the principle shrinks, there is less interest that accrues. Making extra payments is the most direct way to attack a home loan and pay it off more quickly.

Refinance The Mortgage

Another option people should consider is refinancing the mortgage. Essentially, a homeowner takes out a second home loan that pays off the first home loan; however, the new home loan has a lower interest rate. This may allow people to pay off the loan more quickly. Furthermore, people can refinance to a shorter-term, allowing them to pay off the loan more quickly.

Recast The Mortgage

Recasting the mortgage is a little bit different than refinancing. In recasting the loan, people throw a lump sum at the principle in exchange for a new amortization schedule based on that lump sum. This means that people will have a new schedule that reflects the principle that is left, often resulting in a shorter payment schedule.

Split The Monthly Payment In Two

Finally, many people are paid biweekly. Therefore, it might be easier for people to pay their mortgage biweekly. If someone pays their mortgage biweekly, they are making 26 half-payments per year or 13 monthly payments per year. The effect is that someone makes one extra monthly payment per year. This payment attacks the principal directly, helping people pay off their mortgage faster.

Mortgage Tagged: Financing, Financing Options, Mortgage

Looking for something?

Michael

Contact Me


Mortgage Loan Originator
American Mortgage Services Inc.
CALL 727-457-6498

NMLS #1749855
Success Mortgage Partners
APPLY NOW  
GET A RATE QUOTE

Receive My Blog Articles to Your Inbox!

Connect with Us!

How can I help?

  • This field is for validation purposes and should be left unchanged.

Recent Articles

  • NAHB: Home Builder Confidence Ticks Up in April
  • It’s Almost Spring Cleaning Time! Kick Clutter To The Curb With These Home Cleaning Tips
  • 3 Easy Ways to Put Aside a Bit of Extra Cash So You Can Pay off Your Mortgage Faster
  • Boosting Your Credit Score To Qualify For Better Rates
Equal Housing Lender

Previous Posts

Categories


Success Mortgage Partners
1200 Sheldon Rd
Plymouth, MI 48170

Copyright © 2021 Michael Bock  ·  All rights reserved   ·   Log In