Did you know? According to U.S. Census data approximately thirty-four percent of homeowners in the U.S. no longer have a mortgage. If you’re an Arizona retiree that wants to be one of the percentage of homeowners that doesn’t have a monthly payment, then here are 3 tips to pay off your mortgage early.
1.) Bi-weekly Payments: This tactic is a no brainer. There are fifty-two weeks in the year and twelve months. If you pay half your regular mortgage payment every two weeks, you'll have made twenty-six half-payments, or thirteen full monthly payments by then end of the year. So you’re effectively making a full extra payment each year. Check if your bank will set up a biweekly mortgage payment plan and ask the bank to credit extra payments toward principal so you save more on interest expense.
2.) Creative Refinancing: There are a few ways you can refinance your home loan to help you pay off your mortgage early. You can refinance your mortgage to a lower rate but keep making the higher payment which helps shave years off your mortgage. Or you can refinance your mortgage to a shorter term which cuts the amount of interest you pay sooner.
3.) Give a Little More: You’d be surprised what a difference even paying just a little more will make on paying off your mortgage sooner. Even something as small as rounding your payments up can help. For example: Round a mortgage payment of $644 up to $650. A mere $6 more a month on a $200,000, 30-year loan can save you four payments at the end of the mortgage loan! Also, be sure to apply any extra money you pay towards paying off your mortgage to the principal balance, not just the next payment.
Obtaining the dream of living debt-free by paying off your mortgage early may seem like a stretch, but it is actually a perfectly obtainable goal if you stay focused. If you’re an active adult looking to sell your Phoenix home or find a home in a luxury Arizona retirement community, please contact Sharon Mason today!