Many families find that owning their own home is a better option than renting. Homeownership has many benefits, such as having something you own and can pass down to your children. Most people cannot afford to buy a home in cash, so they must take out a mortgage. Mortgages are typically 15-30 years, but there are ways to pay off your mortgage faster with a few strategies.
Most mortgages have a monthly payment plan, but you can elect for a bi-weekly payment plan. For example, your monthly mortgage payment is $1,000 or $12,000 a year. If you make bi-weekly payments at $500 every other week for 26 payments a year, you will pay $13,000 that year. This $1,000 extra could allow you to pay off your home seven years earlier! For mortgages, additional small payments can make a huge difference.
Another strategy to pay off your mortgage faster is to refinance to a 15-year mortgage if you have a 30-year mortgage. One of the biggest drawbacks of this strategy is that your monthly payments will increase by a decent amount. You will have to pay off your home in a shorter amount of time. However, this will shave off many years that you have on your mortgage and pay less on interest overall.
A final strategy is to make an extra payment each year. This is similar to a bi-weekly payment plan, but instead of just putting $1,000 extra towards your mortgage in a year, you may be able to put $5,000 to $10,000 depending on your saving goal. This is a way to ensure that your monthly bills are being paid while putting extra towards your mortgage in one chunk.