4 Creative Ways to Pay Off Your Mortgage Faster

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       typesofaid.com Staff
You want to pay your mortgage off as quickly as possible, but this can be quite a challenge. People often get into a habit of making the same mortgage payment each month and never considering that they have options that could shorten the process. There are, however, some creative and often overlooked ways to pay off your mortgage more quickly. Let’s look at some of the possibilities you might not have considered.

1. Make a Small Increase in Your Monthly Payments

Paying even a little more each month will shorten the length of your mortgage loan. You may have to adjust your budget here and there to find the extra money. Most people, if they look at how much they spend on frills such as fast food, coffee and impulsive purchases, can find ways to make a larger mortgage payment each month.

2. Make Biweekly Rather Than Monthly Payments

This is a trick that allows you to make the equivalent of one extra monthly payment per year. The reason for this is that when you make biweekly payments, you will be making a total of 26 payments in a year. This is the same as making 13 monthly payments rather than 12.

3. Use Tax Refunds, Work Bonuses and Unexpected Dividends Towards Your Mortgage

People often like to use tax refunds as a way to make fun purchases or perhaps take a vacation. While this can be nice, it will be better for your financial health to think of your tax refunds as a way to make some extra mortgage payments. Bonuses are another instance where you might have to exercise some self-discipline. It can be tempting to use your bonus to help pay for holiday gifts. If you’re serious about paying your mortgage off promptly, however, it would be wiser to use your bonus to make a dent in what you owe. The same principle applies to any type of unexpected dividends, such as inheritances, gambling winnings or a raise or promotion at work.

4. Refinance to a Shorter Term Mortgage

Refinancing to a shorter term mortgage will allow you to pay it off faster. This will entail higher payments, but it can be worth it in the long run as the day of your final payment is moved forward. The most common way to do this is to switch from a 20 year to a 15 year mortgage. If you can handle it, you might even consider a 10 year plan.