Why and How to Get Rid of Your Mortgage Faster!
Most people prefer to go with the flow; thus, they keep paying mortgages for years and years to come. It is usually a 30-year period, which means you’d probably be spending your youth and most of the middle age with the burden of debt.
If you’re one of those who want to live the later years exploring the world or providing your family with the best living standards, then you should definitely start paying larger portions of the mortgage from this year onwards.
Why you should pay off your mortgage faster
Before you ask why you should pay your mortgage faster, let us go through the advantages of getting rid of it faster.
- The foremost advantage is that you get 100% procession of the house and gain better personal finances.
- You’d be saving big on interest payments over the number of years.
- Moreover, in the long run, you would be able to get a new loan with better lending conditions.
How can you pay it faster?
To avail of these benefits, the most important thing is to pay the mortgage credit faster. General Director of Tu Hipoteca Fácil, Fernando Soto-Hay, says that the useful life of paying mortgage loans is 8 years or at least prior to 15 years. Now the question arises; “how should one do that?”
Allocation of additional income
Manager Fernando suggests that the mortgage credit can be paid faster if you allocate your additional income in paying a portion of the mortgage. Do not just blindly put your usual business earnings or cut down on your and your family’s expenses to pay a larger amount of mortgage. Now it is important that you understand what is termed as your additional income! Some employees receive yearly bonuses which are spent leisurely. Why not use that to pay off your mortgage in advance. Or in some seasons, the business does exceptionally well. This unexpected increase in profit could be better allocated to freeing yourself from the mortgage burden.
Refinance your mortgage to a shorter-term
Another more feasible way is to ask your bank to increase the monthly standing order towards mortgage payment by 10% or 20%. This would mean fewer savings each month, but once you have paid the whole mortgage, the amount you would have paid for the mortgage would serve as your savings. By just paying a few hundreds more each month, you’ll be rid of a mortgage in 10 years or so.
Getting rid of your mortgage faster will serve as a relief from a constant expense that maligns your finances every month and every year. You can then spend this money on yourself and your family.
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