Want to pay off that mortgage faster? If you have good credit and a good record of making mortgage payments, refinancing may be just the ticket for you pending on the current refinance rate.
Even though a refinance requires paying closing costs, getting a lower interest rate and getting a new loan for a shorter term can get those payments over with faster than some may realize. A simple mortgage refinance calculator may be helpful in determining your options.
10-yr and 15-yr mortgages are generally available from most lenders. While the monthly payments are higher than the traditional 30-yr mortgage, more of each payment goes towards the principal and the mortgage is paid off much more quickly. The overall cost of the mortgage is reduced because you are paying so much less in interest.
Not only is the short-term loan available, but it allows making extra principal payments as circumstances allow.
If refinancing isn’t right for you, consistently making an extra payment yearly can reduce approximately 8 years from a 30-year mortgage. That 13th payment of the same amount as the normal monthly mortgage payment goes entirely to the principal and dramatically reduces the number of payments needed to pay off the mortgage. Some homeowners use a windfall such as a tax refund to make that 13th payment. Others just add an extra amount to the principal with every monthly payment. Any of these roads will lead you to success in paying off that mortgage!