Edina, Minnesota
4445 W 77th St , Suite 105
Minneapolis, MN 55435
952-797-6032

3 Tips for Paying Off a Mortgage Loan Early January 25, 2018

Edina, Edina
3 Tips for Paying Off a Mortgage Loan Early, Edina, Minnesota

The majority of homeowners turn to mortgages for home purchases because it's not feasible to pay those sums out of pocket. While making your payments on time is a priority, you should also try to shorten the duration of the home loan. By paying your mortgage off sooner, you can become debt free quicker and save thousands in interest charges. 

How to Pay Off a Mortgage Loan Early

1. Pay Extra

A simple way to pay off a mortgage quicker is by paying extra on your bill every month. Whether it's a couple of dollars or a few hundred, the more you pay on your principal balance, the less interest you end up accruing. Over time, these small payment increases can significantly reduce your costs as well as the length of time you pay on your loan.

2. Refinance

You can also pay off your mortgage earlier by refinancing with a shorter-term loan. Most buyers choose 30-year repayment plans because it allows them to obtain a lower payment. However, you usually end up paying a higher interest rate and spending more out of pocket in the long run. Instead, switch to a 15-year loan.

3 Tips for Paying Off a Mortgage Loan Early | Fairway Independent Mortgage Corporatin in Minneapolis, MNIf you originally obtained a 15-year mortgage, you may still shorten the length of your loan by refinancing for a lower interest rate. While the timeframe will technically be the same, you can pay it off sooner by continuing to pay the amount of your original payment. It will reduce your balance quicker and save you money in the long run.

3. Bi-Weekly Payments

Another way to pay off your mortgage faster is to pay half of your total monthly payment every two weeks. Over the course of a year, you end up making 26 half-payments, which translates to 13 full payments — one more than your monthly schedule. Confirm with your lender that there are no prepayment penalties before committing to this plan.

 

Whether you're ready to buy the home of your dreams or refinance your current property, contact Fairway Independent Mortgage Corporation. Located in Minneapolis, MN, they offer both conventional and government-backed mortgage options, including FHA and USDA, as well as refinancing opportunities. Apply for your loan today or learn more about the current mortgage rates by contacting the team online or over the phone at (952) 797-6032.

Other Announcements, Events and Deals from Fairway Independent Mortgage Corporation
A Beginner's Guide to Understanding Mortgages, Edina, Minnesota
If you’re thinking about buying a home, knowing about mortgages and how they work is of the utmost importance. The team at Fairway Independent Mortgage Corporation in Minneapoli...read more
Understanding Your Credit Score for Mortgages, Edina, Minnesota
There are very few ways to access the credit score that matters the most. As much consumer advocacy as exists in society, you wouldn’t think that would be the case. However, for what...read more
Good News for the Housing Market!, Edina, Minnesota
Number of Renting Households Decline for the First Time Since 2004 The 2017 Annual Rent Report prepared by ABODO showed that average Rents rose by 2.4% over the course of 2017. And ...read more
Your Guide to Refinancing a Mortgage, Edina, Minnesota
Your mortgage is a long-term financial commitment that allows you to obtain and keep your beloved home. It might be time to consider how refinancing can benefit you. For more th...read more