What are some tips to pay down your mortgage quickly?
Here is how some people saved themselves money on mortgage interest and paid down their mortgage’s faster.
Of Buyers who purchased between 2014-2017:
18% made a lump sum payment (average was $19,500)
16% increased the amount of their payment (average was $440 a month)
10% increased their payment frequency
Based on this information it’s good to point out that most lenders allow borrowers to increase their principal and interest payments anywhere from 15% to 20% of their original mortgage amount annually. This can be done by increasing monthly or bi-weekly payment amount or by lump sum payments up to 15% to 20% of their original balance.
To your benefit, any prepayment goes directly to the principal owed and reduces your total interest paid.
Here are some tips on how to find the funds to pay down your mortgage
Tax Refund– put some of your tax refund onto your mortgage, even a $1000 prepayment can make a huge difference in the long run.
Change your mortgage payments – from monthly to an accelerated bi-weekly or weekly payment. This can decrease your mortgage amortization anywhere from 18 to 24 months, and of course save you money paid to interest.
Bump your monthly payment– Take a look at where you are “leaking” money and make a choice to put that towards your biggest debt instead.
- Tim’s coffee- $3.00 a day.
- daily lunch’s – average $6.00 – $10.00 a day.
- restaurants- average $50-$60 a meal.
- cellphone- change your plan
Got something to sell– sell it! Put it up on Facebook market place, Kijiji, or have a yard sale.
It’s not about denying yourself the pleasures of life, but by being aware of where your money is going.