Let's face it: no one wants thirty years' worth of debt. Interest adds up, and mortgage payments take up a big chunk of your family's budget each month. However, when you sign on the dotted line, you don't actually have to spend the next three decades locked into that contract. At Wardley Real Estate, our real estate agents know how important it is to take control over your future finances, from moving into a new home to moving up your payoff date. That's why we want to share some of our favorite ways to pay off your mortgage early.
While you're looking at homes in Las Vegas, make sure you know how to plan ahead and make smart mortgage choices that will speed up the repayment process. These tips are a great place to start:
Funnel New Money toward Your Mortgage
Throughout the next few decades, you may find yourself with extra money. From holiday bonuses and tax refunds to inheritances and settlements, extra money is a great opportunity to make extra principal payments without affecting your usual budget at all. Of course, it might make the most sense to save extra money in an investment or retirement portfolio. However, if the return is less than the interest you'd save, put it toward the mortgage instead.
Make Biweekly, Not Monthly, Mortgage Payments
Decades of interest can take a huge toll on your budget. Luckily, there's a simple way to save thousands in interest (and speed up your pay-off) without affecting your budget at all: switch to biweekly payments. In other words, divide your monthly mortgage payment, and pay half of it every two weeks. Biweekly payments add up to 13 half-size payments each year, rather than 12 full-size monthly payments. That extra payment? It slashes your interest payments and the time it will take to pay off your mortgage.
Refinance to a 15-Year or 20-Year Mortgage
If your income increases or your budget has room for larger payments, you might want to refinance your 30-year mortgage to a loan with a shorter term. Because interest costs go down so much on shorter payoff schedules, 30-year mortgage payments aren't actually half the price of 15-year mortgage payments. You'll be paying more, but your housing costs certainly won't double, and you'll also save tens of thousands on interest over the life of your loan.
Are you looking for your next home in Las Vegas? Contact Wardley Real Estate to team up with a real estate agent who can help you find the property of your dreams.