A lot of people are dealing with mortgages for one reason or another, it could be because of foreclosure, or refinancing and some people are just now beginning to purchase because the rates are so low. Mortgages seem to go on for years and years but if you are looking to pay your mortgage off early and get from under all of that debt then you may want to start paying extra money towards your mortgage. The good thing about this is that it doesn’t have to be a lot money.
There have been reports of some people who have paid their mortgage off early by shaving off 5 to 10 years off by paying extra money. Depending on the situation and circumstance and the size of your mortgage you could apply $50 extra toward the principal balance and it could knock maybe 7 or 8 years off the mortgage.
When ever you send in extra money to be applied towards your mortgage make sure you include a note with the payment explaining that the extra payment should go towards your principal balance. If you don’t designate where the payment should go it could be applied in the same manner that your regular payment is applied or the money could end up in your escrow account.
Not only do you get your mortgage paid off faster but you save yourself thousands of dollars in finance charges by paying off the account prior to the established term of 30years. Any amount over and above your standard payment helps you to get your mortgage paid off faster. The more money you apply the faster the mortgage loan is paid off. Some people pay one payment per monthly consistently instead of disciplining themselves to pay off their mortgage before time.
Another method for paying off your mortgage is to make a ½ payment every two weeks and by this method you actually end up paying 13 payments per month as opposed to 12 payments. This also helps to reduce your principal balance and get it paid off a lot faster. Before you plan out your repayment schedules and arrangements it is always a good idea to check with your mortgage company to see if this method of payment is acceptable or allowable. There are some mortgage companies that will not accept this method of payment. They will only accept full monthly payments per month.
Always pay on time so that you don’t incur any late charges because they can be added to your principal balance and that will prolong the term of your loan