This BLOG On Making Extra Mortgage Payments To Pay Off Loan Balance Early Was UPDATED And PUBLISHED On September 23rd, 2019
Every homeowner’s dream is to have a home that is free and clear.
- Most homeowners have a 30 year fixed rate mortgage loan
- The term to pay off their mortgage loan is 30 years if they make the minimum principal and interest mortgage payment
- However, by making extra mortgage payments, a homeowner can pay off their mortgage loan balance many years prior to the 30-year term is up
- Making extra mortgage payments every month does not have to be a substantial amount
- It is just a practice and habit of paying just a little bit of extra payment each and every month extra in addition to their monthly minimum mortgage payments
As long as homeowners can afford making that little extra cash they have on mortgage payment instead of splurging on other items such as the following:
- reducing going out to eat, going out to bars
- or other non-necessary spending habits
By making that extra mortgage payment and applying towards the principal, many can reduce their 30-year mortgage term to 25 years, 20, years, or even less than that
In this article, we will cover and discuss Making Extra Mortgage Payments To Pay Off Loan Balance Early.
Benefits Of Making Extra Mortgage Payments
The main benefit of making extra mortgage payments each month is homeowners get to save tens of thousands of dollars in mortgage interest over the life of the mortgage loan. They get to reduce their 30-year mortgage loan term.
- If homeowners were to pay an extra $100 per month towards their principal and interest every month they can save thousands in mortgage interest
- Can most likely reduce mortgage term by more than 5 years depending on how much mortgage balance is
- A couple of hundred dollars in making extra mortgage payments every month can mean a 10-year reduction on the term of the loan
- The higher the mortgage rate, the better result borrowers will make in making that extra mortgage payment every month
- Many homeowners who are disciplined in making extra mortgage payment every single month can reduce their loan term by more than half
- How would you like to have the mortgage paid off in 15 years or less
- It is not impossible
- It is definitely doable without changing financial profile
Best Investment By Making Extra Mortgage Payment
Consider that making extra mortgage payments every month an investment.
- The more extra payment homeowners make on their mortgage payment each and every month, the more they can get a return on investment on their home
- The best investment most Americans can make is the investment in their home where there is little to no risk
- Making extra mortgage payments every month will rapidly increase equity in the home
Think Ahead Of Retirement
All hard-working Americans will retire.
- When they retire, they will definitely see a major reduction in their income
- This is no matter if they have social security income, pension income, or income from their retirement accounts
- The housing payment is a person’s biggest monthly expense
- For a retiree, mortgage payments can exceed more than 50% of their monthly fixed income
- The mortgage payment is not the only expense
- Homeowners also have gas bills, water bills, electric bills, cable bills, telephone bills, internet provider bills, and other monthly bills
All these bills are where many seniors stress over their monthly bills due to their mortgage payments.
Thinking About The Future And Retirement
Everyone’s retirement plan should be by having their homes paid off by the time they retire. The best way to do it is by paying a little extra every month towards their mortgage loan balance. I have seen many times over and over where a $200 extra monthly mortgage payment every month can reduce the 30-year mortgage term to less than 15 years or less.