Most homeowners always find it easy to repay their mortgage in longer periods as the better option. However, it turns out to be a burden since a mortgage of thirty years makes one feel like it is becoming too much. On the other hand, repaying the mortgage ensures one gets the following advantages.
- A lot of money gets saved from the interest by reducing the time get spent repaying the mortgage. In addition, it cuts down the interest which depends on interest rates, original term, and the loan amount, thus resulting in important savings
- Repaying the mortgage ensures it frees up money that gets used in other projects in life and gets much exciting, thus making one plan well
- In situations with many mortgages, it is advisable to consolidate all of them as one loan. By doing so, the blanket mortgage ensures proper management of the loan. The advantage of blanket loans is that one has to invest more cash in the repayment and they can save a lot on interest rates
The following serves as the strategies one can use in ensuring they repay their mortgage in the earliest time possible.
- Creating room in one’s budget. You are required to pay more than the set monthly amount due to beat the total amount by doing this. However, you get to reduce the principal amount at a very high rate and save on the interest expenses since the term duration is shortened. In addition, adding more contributions to the monthly repayments saves more on the interests on the last days of interest repayment. To achieve all this, one must budget well to make all the additional costs get catered for in the best way. Therefore, some apps have been made to help people budget appropriately in their finances and get known as budget apps
- It is advisable for one to make extra principal payments. A homeowner should make extra payments every month since this will give one a tax return after the very end of the fiscal year. All the extra funds channeled towards one mortgage need to get accredited to the loan principal; thus, the principal gets reduced with time
- Recasting one’s mortgage. At this point, a homeowner is required to make one lump sum amount towards the payment of the loan principal. The lender amortizes the loan and reflects the new principal balance. Recasting the loan reduces one monthly repayment and saves much on the interest at the need of the loan. If all the savings get summed up, they reduce the mortgage period in the long run and this is the advantage of mortgage recasting
- Refinance to a shorter-term length. Most borrowers recommend a longer repayment period to reduce monthly payments which add up to 30 years. One should refinance the mortgage since the income changes and increases as time goes by, thus changing the lifestyle and thus free up more cash flow. The cash flow needs to be refinanced on the mortgage to reduce the period for repayment. It gets very important to get to know the mortgage closing costs before refinancing it since if it gets expensive, thus no need to refinance
- Pay Biweekly. Instead of paying a loan once a month, it gets advisable to pay two times a month and thus making more payments at the end of the year. Doing this quickens one’s repayment process since one will manage to make payment for two years by the end of each year. In doing so, a homeowner is able to save a lot of money on an over-life loan. Once the borrower gets engaged in paying a loan biweekly, it gets good to inform one’s lender so that no extra cost can get charged
The reducing of the mortgage repayment period calls for many disciplines from borrowers since most of it requires adjusting to a new spending culture. For example, business people require one to either increase their income or reduce budget expenditure. Increasing their income can get attributed to introducing new means of expanding their customer base.
Customer can get increased by applying some of the following means:
- Creating a killer website that will create business awareness to the customers
- Having an attractive logo
- Ensure they advertise their business online for most customers to get aware of their businesses
- Ensure they use social media in marketing the business
- Ensure they get out of their comfort zone, intending to expand much on the business