Not having to worry about paying off your home can be a great feeling. All of a sudden, you would have extra money in your budget. The financial burden can be lifted from your shoulders by following these simple steps to paying off home loan sooner rather than later.
1. Increase your monthly payment amount.
This doesn’t need to be a large amount each month. For obvious reasons, a larger amount will get you to your goal faster than a smaller amount. Practice setting aside the extra amount you plan to pay each month and put it into a savings account. If your budget is still sound, increase your regular monthly payment by this amount. Try adding an extra $100 to your payment in the beginning. You can always adjust the amount if finances are tighter during certain months.
2. Make biweekly payments.
If you are have the flexibility within your budget, this is a good way to drastically reduce your first mortgage amount on your home. Consider that you would be making two monthly payments each month instead of one. You have essentially cut the amount of time to pay off your home loan by half. This is not a solution for everyone. This only works for those that have a mortgage that is a lot less than they can afford. If you are able to handle this situation financially each month, you might want to consider refinancing to a shorter term loan.
3. Consider your refinancing options.
If interest rates have dropped since you purchased your home, you may be able to refinance your mortgage with a lower rate. In some cases, a correspondent lender can originate your new mortgage. A correspondent lender provides the funding for the loan and will then sell your mortgage to other area DC mortgage lenders. Mortgages in Washington DC can vary on the terms that you select. It may be in your best interests to consider a term length that was less than the original length of your loan. This is another good way to reduce the amount of time left on your mortgage.
4. Cut down on your other expenses. This may mean that you save more of your expendable income.
You could also negotiate down your other monthly bills. Take the extra savings you have each month and put it towards your home loan. Every little bit helps when you are working towards eliminating your debt load.
5. Use other sources of funding.
This extra money may come from work bonuses or your tax return. Take as much of the lump sum as possible and use it to pay towards your home loan. If you are able to do this each year, you will reduce the amount of time that it will take you to pay off your home.
Mortgages in Washington DC can be very competitive. Different lenders may be able to get you a better deal. Contact us to let us help you get the best deal.