Tips In Paying Off Your Mortgage Loan Early

This BLOG On Paying Off Your Mortgage Loan Early Was UPDATED On July 1, 2017

Most mortgage loans borrowers have 30 year fixed rate mortgage loans.

  • 30 years is a lot of time to be stuck with a payment obligation and a lot of interest expense that mortgage borrowers will end up paying. 
  • Mortgage interest expenses will be more than principal amount of home mortgage.
  • There are tips and ways of paying off your mortgage loan early.

Make Timely Mortgage Payments

All residential mortgage loans have no prepayment penalties.

  • One way of saving a lot of money in mortgage interest expense and paying off your mortgage loan early is by making extra payments besides the minimum monthly mortgage loan amount due. 
  • The additional payment pays down the principal amount of the mortgage. 
  • Just by making an additional $200.00 monthly payment towards principal reduction on a $400,000 mortgage loan with a 4.0% 30 year fixed rate will reduce 30 year payment to 25 years. 
  • This will save you 5 years in paying off your mortgage loan early.

Make Bi-Weekly Payments Is Way Of Paying Off Your Mortgage Loan Early

Another way of paying off your mortgage loan early is by making biweekly mortgage loan payments.

  • By making bi-weekly mortgage loan payments, homeowners are ahead by an extra month of paying mortgage by the end of the year. 
  • Getting in the habit of making bi-weekly mortgage payments will reduce the term of the 30 year mortgage loan. 
  • Mortgage borrowers who get into a regiment in making biweekly mortgage payments, their new mortgage loan term will be 25.8 years on a $400,000 mortgage loan with a 4.0% mortgage rate on an original 30 year fixed rate mortgage loan. 
  • Making bi-weekly mortgage payments will help paying off your mortgage loan early by almost 5 years.
  • This means thousands of dollars in mortgage interest expense savings.

Choosing Shorter Term

  • Another option in paying off your mortgage loan early is by getting a shorter amortized mortgage loan.
  • By getting a shorter term mortgage loan will increase minimum monthly mortgage payment obligations.
  • If mortgage borrowers can afford the extra payment, it can save tens of thousands of dollars over the life of the mortgage loans .
  • This will help in paying off your mortgage loan early.
  • There are 25 year, 20 year, 15 year, and 10 year fixed rate mortgage loan programs.
  • Homeowners with any questions on the types of mortgage loan programs that is available please contact us at 1-800-900-8569 or email us at gcho@gustancho.com.

Pay Down With Lump Sums

Homeowners who have additional cash that is sitting in bank account not earning any interest income, may consider paying down mortgage loan.

  • By making a one lump payment will pay down principal .
  • There will be no interest charged on principal pay downs.
  • Paying down principal will save homeowners in mortgage interest expense. 
  • Remember by doing this, monthly payment will still stay the same unless they refinance and restructure mortgage loan.

Refinance Current Mortgage Loan

Monitor the current mortgage rates.

  • Homeowners should consider if refinancing their mortgage loan can reduce their monthly housing payment.
  • Refinancing to a lower mortgage interest rate can save homeowners tens of thousands of dollars in mortgage interest expense over the life of the mortgage loan. 

Mortgage borrowers who need to explore the idea of refinancing or qualifying for a home loan, please contact us for a free, no-obligation, consultation at 1-800-900-8569 or email us at gcho@gustancho.com.

Gustan Cho, NMLS ID 873293

Related> Bi-Weekly Mortgage Payments

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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