How to pay off your mortgage quickly
Tuesday Dec 01st, 2020Share
Real Estate Matters
Many financial planners will tell you that one of the best investment strategies you can adopt is to pay off your mortgage in the shortest time frame possible. Here are a few tips to put your mortgage repayment schedule on the fast track, and with a minimum of hassle and stress.
- Select the most frequent payment option available. By choosing to make your mortgage payment on a bi-weekly, or better still, a weekly basis versus monthly payments, the result is making extra payments every year. Over the life of your mortgage loan, this approach can save you thousands of dollars in interest, and pay off your mortgage years earlier. Best of all, you’ll hardly notice the difference, since you’ll simply be making regular payments.
- Consider a closed mortgage. Getting the lowest rate mortgage available just seems like common sense, yet a great many homeowners choose open mortgages versus the lower rate closed versions. Unless you’re expecting a windfall and are planning to pay off your mortgage before the end of it’s term, closed mortgages may be your best choice. Although you can’t add extra money whenever you wish, most closed mortgages allow for an annual lump sum payment, perhaps ten percent of the loan. Talk to your lender to find out what provisions their closed mortgages offer for repayment. In most cases, you’ll find that the lower rate closed mortgage offers you the best alternative.
- Shop around for mortgages. Gone are the days of “one-stop financial shopping” when people routinely arranged for mortgages at the same place where they did their banking. Your mortgage represents one of the biggest financial commitments of your life, so it pays to do some research and a little comparison shopping. There may also be some financing options available to you that you haven’t even considered. Ask your Coldwell Banker real estate professional to tell you more.
- Lock in rates while they’re at their most affordable. A good way to protect yourself against a potential increase in interest rates is to get pre-qualified for a mortgage, and lock in your interest rate now with your lender. A difference of even a quarter percent in interest can add up to thousands of dollars over the life of a mortgage. Rates are very favorable right now, so why not protect yourself and lock in the current rates while you look for a home, and avoid the risk of paying a higher mortgage payment if rates go up before you close.