If you can pay off the mortgage on your Colorado Springs home faster, that means you will have the benefit of paying far less in interest over the years – as well as the satisfaction of owning your home sooner!
The faster you pay, the more you save. Here are some tips to speed up your payment schedule.
Pay your mortgage every other week.
If you pay half of your monthly payment every other week, then you’ll actually be making 13 payments over the course of the year instead of the usual 12. This is a “bi-weekly” payment program. Since you’re not making the extra payment in one lump sum, you’ll feel the difference much less in your daily life. Over the course of your mortgage, that extra payment every year will save you a lot of interest dollars in the long run.
Make a larger monthly payment.
The more money you put towards your principal balance, the less interest you pay over time. By adding a little bit extra to every monthly payment, you can help reduce your interest payments over time, and potentially pay off your mortgage up to 7 years sooner.
Put that bonus towards the mortgage.
Get a tax refund? A bonus at work? An inheritance? Put unexpected windfalls of cash towards your mortgage. It wasn’t funds you were counting on anyway, so you might as well put it to work if your goal is to pay off your mortgage faster.
Bear in mind, paying off your mortgage as fast as possible isn’t the right answer for everyone. Spending every extra penny you have towards paying off your mortgage may not be a great option for you if you don’t already have an emergency fund or if you have high-interest debt like credit card debt. If you know you’ll sell the house in 5 years, those extra funds may be better used towards other goals.
It is usually best to deal with pressing financial issues before trying to save interest payments on your home loan. If you need help figuring out what is the best route for you, contact us today! We can answer your questions and help point you in the right direction for your particular situation.