This doesn’t sound like a well—thought financial advice. But think of it this way; suppose you direct an extra $100 every month towards your mortgage, how much will you be saving in the long run in regards to interest payments?
Well, forget about that, what about the other boons including clearing your debts faster?
That’s not all; round-outs also do help a great deal. You may NOT feel their impact while paying, but count in a few years and you’ll have settled a significant portion of your loan through round-outs alone. For instance, let’s say your mortgage payment is $2356 per month. By paying $2400 instead of the exact amount, you’re likely to slice off a couple of months from your loan life by the end.
One important thing; make sure the extra money goes towards repaying your principal, but not on the coming month’s payment. That way, you’ll be saving more money on the interest.
Always settle for a shorter-term mortgage. Or at least aim for that through refinancing.
That would mean commitment to higher monthly payments, which may sound strenuous, but then again you’ll be paying off your loan faster.
To begin with, break down the numbers. Make sure you can comfortably afford to pay before you settle for one. If it’s beyond your capabilities, don’t fret. Just settle for a lower one then purpose to increase your income stream, then come back and refinance.
Refinancing is a feasible option whether you’re willing or not. It’s just a matter of setting a target and coming up with a plan. You can even involve your spouse or children if they’re willing and capable of contributing. In addition to repaying your mortgage faster, you’ll be lowering your interest rates, which is actually a good thing with the present economy.