Once you have a mortgage, your goal becomes paying it off as fast as possible. The faster you pay your mortgage down, the less you'll need to pay in interest -- and your home equity will still be there if you ever need a loan. Here are a few tips and tricks that you can use to pay off your mortgage faster.
Begin Making Payments Every Two Weeks
Instead of making your payments at the end of the month, make your payments every two weeks. Making payments every two weeks means that you'll actually make an additional payment every year, due to the way weeks are staggered. This method of payment is also easier for many people because most people get paid every two weeks. Just notify your mortgage company first, because otherwise they may apply one payment to your bill and the other payment solely to principle (which will make you late on interest).
Round Up Your Payments
It usually isn't difficult to round a $1,256 mortgage payment to $1,300 every month, but it'll make a substantial difference over the course of a traditional 30 year mortgage. Rounding up your payments is one of the easiest ways to reduce your mortgage burden because the additional money is always put directly towards the principle.
Periodically Look Into Refinancing
If your credit score has changed or your financial situation has gotten better, you should look into refinancing your mortgage. Every five to ten years, you can look for quotes for better interest rates. Though refinancing does have a cost associated with it -- sometimes a few thousand dollar -- it can greatly reduce your monthly payments by reducing the amount of interest you need to pay. To pay off your mortgage faster, you can continue paying the amount you were previously paying.
Put Bonuses and "Found Money" Into Your Mortgage
Income that isn't expected can be considered a bonus to your mortgage. This can include unexpected gifts, performance bonuses, and inheritances. Every small amount you put towards your mortgage will reduce the compounded interest of your mortgage principle, so investing your "found" money in this way effectively increases the amount of money you found.
The earliest years of your mortgage are the most critical. The more you can pay down in the first few years of your mortgage, the more time and money you'll save. By starting out early with these tips and tricks, you can save yourself thousands or even tens of thousands of dollars.
When I got my first credit card, I had no idea how to manage my money. I made a lot of mistakes that I later regretted and had to spend many years rebuilding my credit. I didn't realize that even one mistake can cause serious damage to your credit score. I did a lot of research into money management and credit repair options and put the effort in to rebuild my credit. This site is a compilation of the things that I've learned and the steps that worked for me. Hopefully the information here can help you to avoid some of the struggles that I faced.