Strategies to Reduce your Mortgage Quickly

Paying off your mortgage early is considered a dream by some. However, with a little creative budgeting, you can take years off your term and save thousands of dollars. Here are a couple of simple strategies to help you reduce your mortgage quickly.

Weekly/Extra Payments

Ask your mortgage company if you can make weekly payments. Most mortgages have interest calculated by the day, so by reducing the balance every week, that is less interest accruing on a daily basis. Rounding the payment to the nearest $50 can also make a difference in the long run, as well as paying lump sums, such as your tax return or any bonuses from your job, toward the balance.

Refinance

While this may seem drastic, it really is a great strategy to reduce your mortgage. You may be able to get a better interest rate or a variable one that will reduce your payments for a period of time. Instead of re-budgeting your finances to fit the new, lower payment, continue to make the higher payment and have the overage applied to the balance. Consolidating other loans into the refinanced mortgage can also free up money that can be applied to the mortgage balance.


These simple steps can help you save thousands of dollars on your loan amount and knock years off your mortgage payments.