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Paying off your mortgage sooner means fewer months of payments. However, deciding to pay off your mortgage sooner is not always a smart financial move for every buyer. For example, if you have a 30-year fixed mortgage at a very low rate, and you want to refinance into a 15-year mortgage, you’ll need to weigh the pros and cons. Yes, you would pay off your mortgage sooner. But, if you can’t secure the same low rate, it might be in your best interest to instead take the money you would have used and put it into other portfolio investments, which yield a better return. Or you may decide to put that extra money to use paying off other debt. In any case, it’s in your best interest to consult with your CPA, or Financial Advisor, in addition to a top-reviewed SoCal mortgage, before making any decisions.
If you decide it makes sense to pay off your mortgage sooner, there are some easy steps to take to get started. Here are 4 tips for paying off your mortgage faster.
- Pay Extra on Your Principal
Most lenders allow for payments above your normal payment, where you may include additional money and allocate it for “principal only.” This will help to ensure that this extra only goes towards your principal rather than principal and interest. Over time, paying even just a small extra amount on your principal can reduce the amount of interest you pay over time.
- Consider Biweekly Payments
If available, you may consider switching from a once-a-month payment to a biweekly payment. Instead of making 12 payments in one year, you’ll make 13 payments, which will save you thousands in interest, and allow you to pay off your mortgage early.
- Use Bonuses, Additional Income as Payments
If you receive an annual bonus, quarterly bonus, or a tax refund each year, you may consider earmarking some or all of it to put into your mortgage payments to help pay it off sooner.
- Refinance into a Shorter Mortgage
There’s no denying your monthly mortgage payment will go up, if you refinance from a 30-year to a 15-year mortgage, for example. But if you’re determined to pay off your mortgage in a fraction of the time, discuss refinancing with your CPA or FA to make sure it helps you to achieve your overall financial goals.
If you’re interested in learning more about refinancing in Southern California to pay off your mortgage sooner, the top-rated team at Summit Lending can help. Our team of mortgage brokers in Orange County, Los Angeles County, Riverside County, San Bernardino County and throughout SoCal has decades of experience helping homeowners and home buyers to find easy home loans with great rates.
Summit Lending is a top-reviewed mortgage company based in Huntington Beach. We provide home loans at great interest rates to first time home buyers, homeowners looking to upgrade to a larger home, homeowners looking for a cash-out refinance, and homeowners looking to utilized. Please call (888) 451-9006, visit us on Facebook, or contact us online for more information.