Are you eager to get out of your home mortgage? If so, you’re not alone. Many people hate the feeling being in debt for as long as 15 or 30 years, especially when it means you’re paying extra in the form of interest for not paying of a USDA home loan or another mortgage early.
The good news is that there are some tried and true strategies that can help you gain better traction and pay off your mortgage earlier. Continue reading to learn more:
4 Common Strategies for Paying Off a USDA Home Loan or Other Mortgage
- Round up on payments. One of the easiest and low effort ways to see your mortgage go down more every month is by rounding up your payments to either the nearest ten-dollar amount or nearest fifty-dollar one. For example, if your payment is $523.50, consider either rounding up to $530 or $550. It’s not a lot and yet this extra bit does make a difference in the long-run.
- Swap to biweekly payments (or otherwise plan for an extra payment). This is a simple trick that actually results in you paying an extra home loan payment but without really feeling it thanks to how you’ll re-budget your monthly expenses. Start by re-structuring your payments to occur once every two weeks.
Those payments should be half of your usual mortgage payment. For example, if your mortgage is $900 a month then with biweekly payments you would pay $450 every other week.
While this seems like the same amount, because there are 52 weeks in the year you will actually be paying one full additional payment. Yet because you’ve restructured your monthly expenses, this extra payment won’t feel like an extra payment. So, win-win!
- Invest tax returns and other windfall cash. Your paychecks aren’t the only form of cash you likely receive throughout the year. Most people will get money from tax returns, year-end bonuses, and things like birthdays and holidays.
While it is tempting to go big and buy ourselves something nice with this cash, it is smart to think long-term. Consider putting a large chunk of this type of windfall cash towards your mortgage so that you can free up more money tomorrow to do the things you love and buy those big items you’ve been drooling over.
- Refinance your mortgage. One of the more common strategies homeowners will use to keep their interest rates low is to swap out their loan and refinance. Refinancing a home loan is a fantastic way to get out of debt more quickly as it can reduce your interest rate and shorten your term.
For example, many homeowners who see their 30-year mortgage taking too long will request a new loan for a 15-year term. While the monthly payments will increase, the interest rates will decrease, and homeowners can pay off the whole sum of the mortgage much more quickly.
Balance Your Finances and You’ll Enjoy a More Rewarding Future
We hope these strategies will help you take better control of your finances. Owning a home is a fantastic thing but owning it out and not being underneath a monthly mortgage payment is the best thing of all.