Freedom Financial Tips for Paying Off Your Mortgage Early

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For most people, the idea that they will be paying off their mortgage for 30 years is a terrifying prospect. Most mortgages are on a 30 year plan- and according to Freedom Financial interest information, you're likely to pay an interest amount a little less than the value of your home if you stick to the standard thirty year mortgage. Paying just a little extra on your mortgage every month can save you massive amounts of money in the long-term. If you're interested in freeing yourself and your family from your mortgage early, Freedom Financial has got your back! Here are a few of our expert tips on paying off your mortgage in less than thirty years.

Consider a bi-monthly mortgage plan. If your mortgage company offers bi-monthly mortgage plans, consider making the switch from a monthly payment plan. On a bi-monthly plan, you'll pay half of your monthly mortgage payment every other week, which actually equals out to one extra full monthly payment over the course of every year, which has the potential to cut four years off your mortgage, saving you four years' worth of interest.

However, be aware that some mortgage companies actually charge you money to switch to a bi-monthly plan. For example, Freedom Financial has found that Wells Fargo charges up to $1,100 over the course of a mortgage simply to stay on a bi-monthly payment schedule. Since bi-monthly payments don't actually do anything to lower the principal amount of the loan, budget out extra money to make additional payments on your own and save the money if your mortgage company does not offer this free of charge.

Throw a little extra money at your monthly payments. Obviously, the best way to pay down your mortgage faster is to make more than the minimum monthly payment on your loans. Freedom Financial research has found that paying as little as an extra one to two hundred dollars a month can take up to five years off a thirty year mortgage plan and save you tens of thousands of dollars in loans.

Sit down with your monthly budget, and look for small places you can cut your spending, and devote your newly found income to paying extra on your mortgage. For example, if you spend $10 a day on lunch with your co-workers, packing just four days of the week will leave you with an extra $160 a month to put towards your mortgage.

Round up your payments. If you don't have a ton of extra money to save and put towards your mortgage, Freedom Financial recommends at least rounding your payments up to the next hundred or tens place. For example, if your monthly payment is $1,140, you can round your payment up to $1,200, a change that you're unlikely to even notice. Rounding up your payments is an easy and small way to take hundreds of dollars of interest off your mortgage that nearly anyone can afford.

Refinance a bad interest rate. If you've gotten trapped in a mortgage with a high interest rate, refinancing is an excellent way to save money in the long-term. Even if you refinance a 30 year mortgage to another 30 year mortgage with a lower interest rate, you'll see lower monthly payments and save on interest.

If you are considering refinancing, make sure you take into account the closing costs of your current loan. If you find a low enough interest rates, you'll save enough to cover and surpass the closing costs- however, you need to make sure that you're getting a significantly lower interest rate to make this worthwhile. Be sure to do the math before committing to a closing cost.

Unless you've really fallen on hard times, you probably have a little extra money to put towards your mortgage every month. The secret to paying off your mortgage early is making regular payments above the minimum- you'll take years off your payment plan, and you'll save thousands on interest payments.

If you need more assistance in creating a plan to pay off your mortgage early, contact Freedom Financial today.