Making Your Mortgage Payment on Time
Staying current with your mortgage payments can save you a considerable amount of money. That is because interest is usually higher for late payments than on-time ones, meaning that you could reduce the overall amount owed significantly by making timely payments.
To guarantee you don’t miss a mortgage payment, set up automatic monthly payments. However, if this option isn’t ideal for you, there are other methods available to get your loan back on track.
Refinance Your Home
You may be able to refinance your mortgage in order to reduce your interest rate or shorten the repayment period. But it is important that you do your due diligence before signing on the dotted line.
Utilize an Amortization Schedule
An amortization schedule will help you calculate how long it will take you to pay off your mortgage and how much interest is owed. It can also assist in deciding the size or frequency of payments that are appropriate for you.
Consider Biweekly Payments
If possible, pay your mortgage biweekly rather than monthly. This will reduce the amount of interest paid on your loan and may allow for extra payments throughout the year.
Put Your Extra Cash Toward the Principal
Before you can start paying off your mortgage, determine how much you still owe. You can do this by looking at a recent statement or calling your lender.
Another way to determine how much you still owe is by using a mortgage calculator. You can locate this one online, which will provide an overview of your interest payments each month as well as what savings could be achieved by paying off your mortgage sooner.
Don’t Overdraw Your Bank Account
If you have access to an overdraft line of credit (also known as a debit card), be sure to only use it for essential expenses. Otherwise, fees could accrue which could negatively affect both your finances and credit score.
Eliminate Other Debts Before Paying Off Your Mortgage
Prior to paying off your mortgage, it’s essential to address other obligations first – such as high-interest credit cards or student loans – which have higher interest rates than your mortgage, thus costing you more in the long run.
Prior to beginning mortgage payments, it’s wise to create an emergency fund and begin saving for retirement. Doing this will put you in a much stronger position to handle other debts when needed.
Invest Your Extra Money
Put that extra cash to good use by investing it in a stock market investment. However, be aware of the risks involved with investing your savings, including the possibility of losing some or all of it.
Before investing your money, consult with an accountant or financial planner for advice tailored to your individual situation.
