The Ultimate Cheat Sheet To Pay Off Your Mortgage Faster 🏠💨

Are you dreaming of the day you can finally say goodbye to your mortgage? Look no further! Here’s a cheat sheet filled with actionable tips to help you pay off your mortgage faster, so you can enjoy the financial freedom you deserve. Let’s dive in!

1. Opt For A 15-Year Fixed Rate Mortgage 📅

Choose a 15-year fixed rate mortgage over the more common 30-year term. While it may mean a higher monthly payment, you’ll save a significant amount in interest payments over the life of the loan.

• For example, a $200,000 loan at 6% interest for 30 years will have a monthly payment of $1,199 and a total interest cost of over $231,000.
• On the other hand, the same loan with a 15-year term will have a monthly payment of $1,688 and a total interest cost of just over $103,000. That’s a savings of over $100,000 in interest! 💰

2. Make Regular Lump Sum Payments 💵

Start each year with an extra lump sum payment towards your principal. Be sure to specify that this payment should be applied to “principal only” when writing the check.

• Use your Christmas bonus or set aside $25 per week throughout the year, resulting in an extra $1,300 payment.
• Keep in mind that lenders may have restrictions on how many lump sum payments you can make per year.

3. Send A Second Check Each Month 📬

Beat the interest trap by sending an extra check to be applied only towards your principal each month, in addition to your regular mortgage payment.

• This strategy allows you to continue paying interest while significantly decreasing your principal balance over time.
• Only send what you can afford, whether it’s $50 or $300. It’s important not to dig yourself into a financial hole just to pay off your mortgage faster.

4. Consider Biweekly Payments 🗓️

Arrange biweekly mortgage payments with your lender. This means you’ll make 26 half-payments instead of 12 full payments each year, resulting in one extra payment annually.

• This can help you pay off your mortgage faster and save on interest.
• If your financial situation changes, you can stop making extra payments towards your principal without penalty.

5. Refinance Your Home 🏠

Consider refinancing your home to secure a lower interest rate or a shorter loan term.

• This can save you thousands of dollars in interest payments and help you pay off your mortgage faster.
• Be sure to weigh the costs of refinancing, such as closing costs and fees, against the potential savings.

6. Opt For A Balloon Mortgage 🎈

A balloon mortgage is another option to consider. With this type of mortgage, you’ll make lower monthly payments for a set period (usually 5-7 years), followed by a large lump sum payment to pay off the remaining balance.

• This can help you pay off your mortgage faster if you’re confident you’ll have the funds available for the balloon payment.
• Keep in mind that this option comes with risks, as failure to make the balloon payment can result in foreclosure.

By following these actionable tips and working strategically with your existing mortgage, you’ll be well on your way to living the mortgage-free life you deserve. So, what are you waiting for? Start chipping away at that mortgage today! 🏠🔨