When it comes to buying a house, you’re probably going to feel overwhelmed at times. Between house hunting, remodeling, moving in, and making house payments, the entire process is a huge step in your life toward what might become a lifelong commitment.
With such a big undertaking, you’re going to want to simplify things as much as possible, and the mortgage is a good place to start. If you can pay off your mortgage quickly, you’ll not only save money on interest but also get it out of the way so you don’t have to think about it.
Here’s five tips on how to pay off your mortgage as quickly as possible.
1. Shop around
Finding a lender can be difficult, and you should definitely take your time. When choosing a lender, you should meet with the companies and discuss your possible mortgage over the long term. Don’t be afraid to be choosy and shop around for the best company and the best deal for your purposes, especially because you’ll likely have to work with the lender you choose for years to come.
2. Ask questions and create a plan
When you take out any kind of loan, you want to work with a company that’ll be there for you. Make sure you pick a lender that has great customer support and knowledgeable representatives who are easy to contact. Choose a company that is straightforward about the process and costs and don’t hesitate to ask any questions, no matter how silly they might sound.
Everyone should be working to help you find the mortgage that’s right for you and set up a payment plan that you can handle so you don’t find yourself way over your head with payments you can’t make, which doesn’t help anyone.
3. Consider a short-term loan
Just like comparing interest rates, you should compare lengths of time as well. Most people will opt for a 15-year loan, but if you’re able to afford a 10-year loan you should certainly consider it. Using a mortgage calculator will help you compare loans, and you’re likely to find that the payments on a 10-year loan aren’t much more than those for a 15-year loan.
4. Don’t just pay the minimum
It seems simple, but the fastest way to pay off your mortgage is to pay as much as you can right away, and even make payments more often than the minimum, in order to knock down the amount you owe. If you can manage to live frugally for a few years and focus on paying for your house, you’ll be able to get the mortgage taken care of and move on to enjoying your home as soon as possible.
5. Look into using a money merge account
This is a popular method in Australia, where borrowers often make use of this approach. The money merge account acts as your checking account, where you deposit your income, withdraw to make purchases, and pay off bills, and ideally end each month with more than you started.
The money for your mortgage goes through that account, and because interest on your mortgage is compounded daily instead of monthly, with this method you end up saving on your interest rate. If you’re good at saving and keeping track of your money, you should look into setting up this style of payment for your mortgage if you can, and use the money you save on interest to make larger payments on your mortgage.