How to Save Thousands of Dollars and Shave Off Years From Your Mortgage Payment

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What would you say if I told you that you could be mortgage-free five to seven years sooner than what your loan payment schedule dictates? And how about if I were able to share with you a simple, easy and very effective way to slash down your total mortgage payment by thousands?

Sure, you can walk into the bank and pay a huge chunk of money toward your mortgage – but who has thousands of dollars lying around? The truth is that if you follow one or more of my tips on how to save thousands and shave off years from your mortgage – you can do it without even noticing it. All you have to do is make one extra payment on your mortgage every year. Here’s how:

Use Your Tax Refund or Bonus Cash

Many households can expect a large chuck of cash at the end of the year (or later depending on when taxes are filed) and that gives them an extra couple or few thousand dollars to work with. If you can channel those funds or even a portion of them according to your mortgage payment, you will effectively pay an extra payment all at once and not have to worry about it for the rest of the year. It takes discipline but is the easiest way to knock off years and thousands of dollars from your mortgage. The same applies to annual bonuses.

Pay a Little Bit More Each Month Toward Your Principal

If a chunk of money each year is too much to handle, another easier way is to divide the amount of your monthly payment by twelve and tack on that extra amount to each month’s payment. So for example if your mortgage is $1,200 – just add an extra $100 to each payment. By the end of each year you will have paid an entire extra payment.

Make Bi-Weekly Mortgage Payments

Yet another easy way to chip away at your mortgage at an accelerated pace is to make payments every two weeks. With 52 weeks in a year it will automatically result in an extra payment and you will not even notice. This can be difficult for some people, given the other expenses throughout a typical month but again, with discipline it’s a great way to manage your mortgage and pay it off much sooner.
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If you can afford making a significantly larger monthly payment, another option is to refinance down to a 15-year fixed rate mortgage. Not only would that reduce your loan period by half but if you haven’t refinanced recently, you could save an additional amount with a new, lower interest rate! At the end of the term, the savings can add up to the tens of thousands of dollars depending on your mortgage amount.

Contact me today if you’d like to sit down and talk about your real estate goals, whether buying, selling, investing or just getting information about our marketplace. I look forward to serving you!