If you’re looking to pay your home loan off quicker, you might be thinking about refinancing to a shorter loan term, but there are other options.
You can make bi-weekly payments or make extra payments when you can. Whatever method you choose, be sure to stay disciplined and consistent so you can achieve your goal of being debt-free sooner rather than later.
10 Ways to Pay Your Home Loan Quicker
Make Extra Payments
Making extra payments is a great way to pay off your loan earlier. You can make extra payments towards your principal balance, which will reduce the amount of interest you pay over the life of the loan.
You can also make extra payments towards your escrow account, which will help you build up equity in your home more quickly. This can be a great way to save money on interest and pay off your home loan faster.
Pay More Than the Minimum Payment
Making more than the minimum payment on your home loan can help you pay it off quicker. You may be able to shave years off of your loan by paying a little bit more each month. There are a few ways to make extra payments on your mortgage.
You could make an extra deposit every month or set up an automatic monthly transfer from your account to your mortgage lender. You could also increase your monthly payment amount if you’re already making extra payments.
Refinance Your Loan
By refinancing, you can get a new loan with a lower interest rate. This will help you save money on your monthly payments and shorten the time it takes to pay off your mortgage. Before you refinance, make sure you compare rates from different lenders.
Also, be sure to calculate how much money you will save by refinancing. This can help you decide if it is worth the hassle of applying for a new loan.
Make Bi-weekly Payments
Making bi-weekly payments to your home loan can reduce the amount of time you take to pay off your mortgage. This is because you are making two payments each month instead of one, which totals the same as making a payment every month.
If you can make bi-weekly payments, you must continue to make your regular monthly payment as well. This will ensure that your loan does not go into default and that you do not face any penalties.
Pay Off High-Interest Debt
High-interest debt can be a significant weight around your neck, preventing you from achieving financial freedom. If you have high-interest debt, one of the smartest things you can do is pay it off as quickly as possible.
One option is to transfer your balance to a lower interest rate credit card. This will help you save on interest payments and allow you to pay off your debt more quickly.
Make a Budget and Stick To It
A budget is one of the most important tools you can use to help you pay your home loan off quicker. When you create a budget, you can see where your money is going and where you can make adjustments to free up some extra cash each month.
Making a budget and sticking to it is the best way to ensure that you have the extra cash available each month to put towards your mortgage. Take a look at your spending habits and see where you can cut back, even if it’s just a little bit.
Get Creative
Though you may be making your regular monthly payments on your home loan, you might find that you’re not able to pay it off as quickly as you would like. This could be due to several reasons, such as taking care of other financial obligations or simply not earning enough money.
Fortunately, there are a few ways to get creative and find other sources of income to help pay your home loan off more quickly.
Although the tips we’ve given are a great place to start, it’s important to remember that there is no one-size-fits-all solution when it comes to paying off your home loan. But with a little bit of effort, you could be on your way to becoming mortgage-free sooner than you thought possible.
With over 25 years combined experience we’re, if you are looking for the right advice and service, look no further than Mortgage Choice Essendon.
