Creative Ways To Pay Off Your Mortgage Faster
Committing to a mortgage is one of the most significant financial decisions anyone can make. When financing your Highland Beach Condo, making the wrong move could lead you to ruin. On the contrary, and in a much more optimistic tone, consider the benefits of paying off your mortgage early. While the benefit to your credit may not be as significant, the loss of funds to interest far surpasses any lost benefit to your credit score. After all, a credit score is worthless if you can't afford what you're qualifying for. For the early birds, late workers, and fiscally present homeowners, here are some creative ways to pay off your mortgage.
Round Up To The Next $100, or $1,000
One way many millennials have automated little savings is with the "round-up rule." It states that any amount spent should be rounded up to the next dollar, with the difference going to savings. For instance, if a candy bar costs $1.17, the roundup rule would determine that the additional $0.83 to reach $2.00 would be automated to savings. The same logic can be used to attack your mortgage. If your payment is $2,687, add that extra $13 to reach $2,700. Though that won't make much of a dent, that number just feels right, and gives you the clarity to drop another $100 or more on top for some real gains!
Reinvest Any Windfalls Into Your Mortgage
For almost anyone not amid a Chapter 7 bankruptcy, a mortgage is likely to be your most significant financial liability. Why let that balance loom for any reason when you can reinvest positive momentum into your largest monthly payment? Windfalls, or sudden sweeps of financial good fortune, are often blown before the recipient knows what to do. Anyone who watched people convert their COVID stimulus into designer handbags knows that discipline in the way of sudden and unexpected victories often flies by the wayside. For an easy, responsible, and incredibly beneficial way to utilize your windfalls, put them back into your mortgage and save thousands, or more.
Add A Few Dollars Per Month To Your Payment
The 52-week rule is another fun method that's often seen in automated savings plans. It states that starting with week 1, you'll save $1. Following this logic, you'll save $2 on the 2nd week, $3 on the third, and so on. Little sums of money can be freed by making small purchasing decisions, or lack thereof, chipping in a little more from your leftovers after payday, or some other way of methodically scaling up your monthly payment without really noticing at all.
Rent A Room
This isn't for everyone, and millennials are rightly sick of compromising what should be their most sacred and private space just to survive the egregious economy foisted on us, but there may be no more dependable way to chip down that mortgage than renting a room. The aforementioned methods may save you a few dollars through a few thousand, but there is no better way to slice your mortgage in half than to rent a room to a trusted colleague, friend, family member, or even significant other. If you can manage a few years with a good company, you can take much more than that off your bottom line.
Pay Down Any Small Ancillary Debts
When you're looking to tackle the big fish, there's nothing worse than guppies tugging at your line. Small debts function similarly, and while they may not be the focus of your repayment plan, they should rotate in for as long as it takes to pay them down. Using something like the snowball method of debt repayment, popularized by the likes of Dave Ramsey, you can consolidate extant debts under a single umbrella and reinvest the funds you were using on these payments directly back into your mortgage. The result is a clearer picture and more money to reach your goals.
Budget For An End Of Year Extra Payment
Budget for an extra end-of-year payment! Maybe not at the expense of that much-deserved vacation, but certainly in sight of many more in the future. This extra payment is a way of freeing months on the back end of your mortgage and can become a time-honored institution of your best fiscal habits. This is much easier said than done, especially when considering single homeowners compared to couples, but it's an attainable way to strike hard at the anchors of interest that may hold you back.
Looking for more real estate tips & advice? Click to see our Real Estate Tips Blog Section