How can I pay my mortgage off faster?

Six Paths to Becoming a Mortgage-Free Homeowner.

At the time of this article, nearly 30 million Americans own their home outright*. Some paid cash up-front and lived mortgage-free from the start, the majority, though, diligently made their mortgage payments every month for thirty years.

If you are like the majority of post-Great Recession Americans, you want to be savvier with your finances, particularly with housing investments. There are a growing number of homebuyers and existing homeowners who are seeking an alternative to being chained to a home loan well into their retirement years.

 There are several actions you can take to pay off your mortgage faster. In this article we share Six Paths to Becoming a Mortgage-Free Homeowner.* 

Once you’ve reviewed the six paths to early payoff, feel free to play with our mortgage payoff calculator to help you figure out how quickly you can pay off your home.

Tinker with the early payoff mortgage calculator and the speak to a Licensed Mortgage Loan Officer about your individual scenario and options.

PATH 1 – Buy your Home with or Refinance into an Offset Mortgage like HomeSelect

For some borrowers, the mortgage chosen alone can help pay off your home faster. Offset Mortgages, like HomeSelect from Geneva Financial, can be a good option for people with strong credit and a positive cash flow.

Essentially a high-end “money management mortgage”, HomeSelect comes with a bank account tied to the mortgage. Your account is checked daily and the balance is deducted from the principal on your loan prior to interest being charged, saving you tens of thousands of dollars in expensive interest.

The balance in your account is still available for bill paying, groceries, gas, anything you want and comes with a debit card to access your funds – same as a standard bank account.

Additionally, once your home has equity, it can be drawn on immediately from that account without having to do a traditional refinance.

PATH 2 – Biweekly Mortgage Payments

Making biweekly payments will add up to 13 monthly payments in a year instead of 12. That extra payment can knock off 8 years from a 30-year mortgage, depending on your interest rate.

PATH 3 – Four Extra Loan Payments Every Year

Contact your loan servicer first to determine if they will accept extra payments towards principal only once a quarter. If allowed, make one extra payment equal to your normal mortgage every quarter.

An extra payment a quarter made consistently through the life of your loan can shave 11 years off your mortgage and save you up to $65,000 in interest.

PATH 4 – Refinance into a 15-Year Loan

If you are in a position to lay down a little cash in closing costs, you may want to take a look at refinancing your home into a 15-year loan. Obviously you’ll save an immense amount in interest by paying the loan in half the time, but is it the right move for you?

A lot will depend on your current interest rate, your current other debt and your ability to commit to the larger payments on a 15-year loan at lower interest.

This path is best discussed with a licensed professional that can help you decide if converting is truly a benefit to you. 

You can access a list of Licensed Loan Officers by state HERE

Just $100 extra a month applied towards principal can save you up to $28,000 in interest and shave years off your mortgage loan.

PATH 5 – Smaller Extra Payments

Can’t afford the biweekly schedule or the quarterly extra full payment? Try bite-sized extra payments. Applying just $100 extra every month can save you upwards of $28,000 in interest.

Still feel crunched? Find the $100 (or maybe even a little more) within your current spending habits and make a sacrifice for the greater good.

Some things to consider scrapping include:

? Take your lunch to work (pass on the sandwich delivery)

? Drive past the coffee shop and fill up at work

? Cancel that expensive cable bill and chill with Netflix

? Look at all the recurring subscriptions dinging your account and get rid of a few. Especially the ones you keep forgetting to cancel and know you don’t need. 

There’s an app assistant that will find and cancel subscriptions for you! Check out TRIM and start saving to pay off your mortgage!

 PATH 6 – Downsize

For some, downsizing could seem a little drastic or not an option at all. However, if you are looking to live mortgage-free or at least with smaller debt, you may want to review your situation and determine if downsizing is feasible.

 A Mortgage Loan Officer and Real Estate Agent can help you estimate how much equity you may have in your existing home based on recent home sales in your neighborhood. You won’t know your true equity until an official appraisal is performed, but estimated values are good to help you gauge if you should even consider selling and downsizing.

 If it turns out you have a solid amount of equity in your existing home, you may benefit from applying the profits to a smaller mortgage and cutting your monthly payments dramatically. With your new mortgage, apply one of the extra payment paths in this article and you could be mortgage-free in seemingly no time!

Finally, a couple things to keep in mind no matter what path you choose:

 ? Check with the mortgage company that holds your loan. Some companies only take additional payments during specific time or they may charge you prepayment penalties.

 ? Always include a message with your extra payments that you want them applied to your principal balance and not the next month’s payment.

*Statistical Source: The Urban Institute. This article is not intended to serve as professional advice for your individual circumstance. Every scenario will vary, and you should seek the advisement of a licensed mortgage loan officer or your financial advisor to make determinations on your personal circumstance.

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 Copyright?2019 Geneva Financial, LLC, NMLS #42056

This is not a commitment to make a loan.  Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements for refinances, and final credit approval. Not all applicants will qualify. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions.  Geneva Financial LLC is not acting on behalf of or at the direction of HUD/FHA or the Federal Government. Geneva Financial LLC is approved to participate in FHA programs but the products and services performed by Geneva Financial LLC are not coming directly from HUD or FHA.  Geneva Financial LLC NMLS #42056 is an Equal Opportunity Lender and Equal Housing Lender. 3155 S. Price Rd Chandler, AZ 85248. 1-888-889-0009.  AZ BK #0910215