A mortgage is a big financial commitment with a monthly payment that is usually a large percent of a family's income. What could you do with that extra income if you didn't have to pay the mortgage every month? Answers generally range from savings to vacations. If you're looking to get ahead on your mortgage, here are four tips that are easy to integrate into financial plans.
Rounding up your mortgage payment by any amount makes a difference. Even adding a little bit to each payment shaves months from the total time you're paying a mortgage, and rounding up by $30 or more a month could reduce your total payment time by years. Round up to the nearest 10 or 100 if you are able; a $452 payment might become a $460 or $500 payment.
Convert unexpected income to unscheduled mortgage payments. Small monetary gifts, bonuses or savings from a planned purchase can all be paid toward the mortgage. If you're current, these amounts usually go directly to the principle balance.
Make your payments in a biweekly format instead of the monthly format to reduce the amount of interest you are paying. Divide the mortgage payment in two and pay that amount every two weeks; the bank is then charging interest for two weeks on less than it would have been. Over time, those interest savings add up to thousands and can reduce the time you have to pay by years.
Plan to make one unexpected payment every year. Making a single payment of a few hundred dollars in addition to your existing payment can decrease your payment time by several years depending on your mortgage terms.
If paying your mortgage at all is the problem, then attempting to get ahead might be out of the question. If you're struggling with debt and your mortgage note, consider seeking legal assistance to find out what options you have for recovering or starting over.
Source: CTV Canada AM, "Tips on paying your mortgage off earlier," Pattie Lovett-Reid, accessed Dec. 18, 2015
No Comments
Leave a comment