Many homeowners in the United States wish to get their mortgages out of the way as early as possible. Mortgage debt is often badgering and can be cumbersome to think about daily, which is why finding ways to pay them early is popular. Mortgage interest rates can often be challenging to keep up with if they are relatively high, and the best way to get out of it is to make the full payment quickly.
Money matters are always a complicated endeavor, and getting rid of the debts that stack up can be a relief for many. Retirees can enjoy increased cash flow once their income transitions into a fixed one, which is why having a fully-paid house as soon as a person transitions to retirement are essential. Other younger people can enjoy less financial stress because of the emotional impact of owing money to someone looming over their heads. No matter what the reason is, there are some tips that your local mortgage broker in Salt Lake City can help with when it comes to paying off mortgage rates early:
1. Make Additional Payments When Possible
If you’re in a financially-sound situation with a good income and a high-enough paying job, you can start splitting your monthly mortgage payments in half. Paying bi-weekly is good if you’re financially secure and can afford to drop extra cash in mortgage payments more often. Doing this will give you what is equivalent to 13 months of payments instead of the usual 12, which doesn’t make a significant dent in monthly budgets.
However, this is subject to whether the lender will accept these terms, as some might not because of complications. However, if you can start your payment terms like this, there may be a larger chance of your request being accepted than asking about it down the line.
Sometimes, you might be able to pay more each month to allow the principal to be reduced faster, which might save tens of thousands of dollars in the end. Depending on the mortgage interest rates, the savings can be even more significant.
2. Apply for a Mortgage Refinance
If you apply for a refinance service, you’ll want to consider the mortgage rates for a refinance. It usually only works best when you can get lower mortgage interest rates out of it. Otherwise, it might not be worth the excessive fees that are glued to a refinance, so ensure that your savings from the deal cancel out the entire costs of the whole process.
3. Apply for a Mortgage Recast
Mortgage recasting can help you keep your existing loan by paying a lump sum towards the principal. The bank will then adjust the amortization scheduled to show the updated balance in your account, resulting in a shorter term for the loan repayment. The best part about a recast is that the fees are lower than refinancing. At a few hundred dollars, these cannot be beaten. Additionally, having lower mortgage interest rates will mean that this method is better than refinancing, so consider your options.
4. Start Making Lump Sum Payments
Starting lump sum payments towards your loan’s principal amount is a great way to begin slashing off chunks from your debt amount. If you have acquired a significant bonus or have inherited money or valuable items, these can be used to pay the principal. If you’re a veteran that has applied for a VA loan, these cannot be recast, meaning lump sum payments can be the best option to follow.
No one likes being in debt, which is why making payments for your mortgage loans and other credit card bills in-full and on-time feels incredible. If you’re planning to start paying off your home loans in Salt Lake City quicker, use these four tips to ensure that you can do so with haste.
Frontline Financial are mortgage brokers in Salt Lake City, Utah, that help veterans buy their homes. Only very few answer the phone when duty calls, and we are ultimately grateful for the men and women who lay down their lives for our wonderful country. Contact us to learn more about the best mortgage rates available for veterans today!