Thursday, July 10, 2014
A home loan takes years to pay off, and often makes up the biggest chunk of your expenses. Paying off that mortgage sounds unimaginable, but there are ways to go about it. Get some tips…
Cut back on expenses
This will always come up. Do not add to your expenses, especially on things that gain interest such as more loans on your credit card. See where you can trim your every day expenses, be it by disconnecting the cable bill or staying in more often. This won't make a huge dent, but it will help significantly.
Don't rely on your day job. Create opportunities to earn an extra income like looking for a temporary job you can easily do after your nine-to-five. Find a skill that you can use, and use that to make yourself some extra cash. Put the extra cash, as in all of it, into paying off your debt.
Make biweekly payments
This way, you end up making two extra payments or a month's extra payment at the end of the year. The extra payment can also be applied directly to your principal and reduce the term of your mortgage.
Refinance into shorter-term mortgage
If at some point in the course of your mortgage you can lower your interest rate and shorten your mortgage, do so. If you can absorb the additional payment, you will also end up paying off your mortgage twice as fast and save yourself months off worry.
Increase monthly payments
Instead of refinancing, just write a bigger check for the monthly payments on your own. This flexible option will allow you to pay more when you can afford it. While you will be paying less than if you refinanced, you will not be enjoying the lower interest rate the way you would if you refinanced.