A mortgage is the biggest financial investment you will make in your life.
You want to own it outright before you retire, but that can take years.
Paying off your mortgage faster makes financial sense, but how do you do it?
The process of paying off your mortgage is not as complicated as people make it.
If you are really cash-strapped, this article will help you tremendously.
What are some quick and easy steps to paying off my mortgage?
1) Make Sure Your Payments are Automatic.
Many people already pay their mortgages this way, but you should check to be sure that it is really happening.
You do not want to risk having the bank not receive the payment on your loan. Not only will they charge you extra, but your credit score will drop because of non-payment.
If automatic payments are not set up with your bank, call them right away and ask how to change it so it happens automatically every month! It is quick and easy to do once you know-how.
Remembering when the date is each month can cause problems in itself, so this step alone can save you time spent worrying about whether or not payments were made.
2) Cut Out Luxuries.
Think about the little things you buy that are not necessary, and cut them out.
Put that money towards your house payment instead.
This will not only help you pay off your mortgage faster, it will also help you become financially independent because there is less debt! Once you have paid off your home, then you can start enjoying life again with all the extra money in your pocket.
3) Get a Side Job or Second Job to Make Up Extra Money For Your Mortgage Payment.
Can’t get rid of those luxurious habits? Then get another job so that at least there is more coming in each month!
You can even try cutting down on expenses even further if possible to see if this would change anything. Even taking on a second part-time job can help pay extra money towards your home each month.
If for no other reason than to get you out of the house and take your mind off everything that is keeping you up at night, this is a great way to start paying down your mortgage faster.
4) Open a Savings Account For Your Mortgage Payment.
After you have tried all the above if there still seems to be something left over then open a regular savings account or another investment account and put all that extra money into it.
You may even want to see how much more progress can be made with investing in some stocks.
The stock market has high returns but also carries risks as well.
However, if you do not mind putting in research on different companies and possibly even testing out different investment strategies, then this can be a good way to make even more extra money each month.
5) Remember the Power of Compounding Interest.
The last thing you want to do is not pay your mortgage for as long as possible so that you also earn interest off the initial amount paid on your home.
While this may seem like a great idea in theory, it actually makes more sense to get rid of your house payment as soon as possible and then start saving and investing that money again (like in tip #4).
This will help you save up even more money later to use towards future investments or whatever else you want. Paying off your home early means saving on thousands of dollars worth of payments – why would you try to keep that money when you could put it towards investments and earning even more in the long run?
6) Cut Out Expenses.
If there is no room left in your budget for anything extra, cut out some expenses. Stop buying lunch or sodas at work each day, or start brown bagging it.
Cut back on cable TV and only watch the most important shows if you must have cable television at all. Cancel unused memberships which are costing you money monthly.
Just by cutting back on small things could save hundreds of dollars each month towards your house payment!
This sort of thinking can not only help pay off your mortgage faster, but also help decrease debt enough so that one day will be able to buy another house or even start investing for retirement.
7) Look For Other Ways to Cut Expenses.
The best way to find ways to save money is to keep a spending journal for a month and write down every single thing that you spend money on throughout the entire month.
Then, go through each one and think about what would happen if that expense was eliminated from your life forever?
This may include anything from cancelling memberships, getting rid of cable TV, cutting out lunch at work, etc.
The goal here is not only to help pay off your mortgage faster, but also make your financial situation better by decreasing debt and increasing savings! In addition, once you get used to tracking all expenses it becomes much easier over time and then after a few months, you will notice that your spending habits have changed enough to where you are not spending as much money per month.
8) Be Wary of the Dangers of Debt Consolidation Loans.
This may sound like a great option at first, but can actually cause more damage than it is worth in many cases.
Plus with most debt consolidation loans comes additional fees which make paying off your mortgage faster harder than ever!
That is why it is best to go about getting out of debt without taking on more debt. If there are thousands upon thousands of dollars worth of credit card bills each month (which many people experience), then this can be one way to help pay them down quickly by consolidating all those monthly payments into one monthly payment – but at a price.
9) Start an Emergency Fund.
Many people go about their lives thinking that they will never have any emergencies, and therefore do not need to save up in case something bad happens.
However, life is full of unexpected twists and turns – car problems, medical bills, job loss: the list goes on and on! This is why it is important to start an emergency savings account with at least $1,000 in it at all times. It should only be used for emergencies such as these or if your house payment somehow becomes due unexpectedly (see tip #10).
After you pay off your mortgage early using tips 1-9 above though, this fund can be used toward investing further for retirement. For example: if you have an emergency fund with $10,000 in it and you need to pull out $5,000 for a house payment – you can just take the money from this fund.
But once your home is paid off, that money can be used towards other investments or retirement savings.
This way after a few months of saving up again, you will eventually end up back where you started at having another $10K in emergencies saved up.
10) Don’t Let Unexpected Expenses Ruin Your Financial Plans!
There are always going to be unexpected expenses in life that cannot be avoided no matter how hard we try.
However, the key here is maintaining control over our financial situations by knowing what to expect ahead of time and being prepared for things that come up.
If you find that your house payment is suddenly due and you do not have the money to pay it, then this will cause a major problem in your financial situation – possibly even leading to foreclosure!
That’s why it is important to maintain control by having plan ‘B’, which should always include an emergency fund .
Don’t let the unexpected ruin your chances of getting out of debt and paying off your mortgage fast: be prepared!
11) If Possible, Make Bi-Weekly Payments.
When paying off any type of loan such as a car or home loan over time, many lenders will allow you to make bi-weekly payments rather than monthly payments.
This can help keep more money in your pocket, which in turn can help pay off your mortgage early. If you are unsure whether or not this is an option, then call your bank and ask them.
To wrap things up…
Paying off your mortgage early is one of the best things you can do to improve your overall financial situation.
This is because it literally frees up thousands of dollars each month – money which can be used to invest or spend on experiences with family and friends instead of paying off a 30-year loan where you had no choice in what happened with that money.
That is why it is important to take certain steps throughout this process in order to maximize results, while also setting yourself up best for future success! When it comes down to it, people who get out of debt are happier than those who don’t since they know how good it feels to finally get control over their financial situations.
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