Pay Off Mortgage Early: Strategies for Financial Freedom
If you want to reach financial freedom, paying off your mortgage early is the key. Learn about strategies to help you do this, in this comprehensive article.
Discover the Joys of Paying off Your Mortgage Early
Does the thought of being mortgage-free fill you with a sense of financial freedom? If so, consider pursuing the age-old goal of prepaying your mortgage. But don't just stop there, also create a budget you can stick to so that you can pay off your mortgage as quickly as possible.
Do You Have to Pay Early?
The first thing to consider is whether or not it's even necessary to do so. After all, there are those who don't pay off their mortgages and instead invest the money in other investments that provide returns and fulfill their financial goals. The most important factor to consider is whether or not prepaying your loan is in your best interest. If your savings rate is higher than your mortgage's interest rate, then it may be advisable to leave your money invested rather than overpaying your loan.
Strategies to Pay off Your Mortgage Early
Paying off your mortgage isn't as daunting as it might seem. Here are a few strategies to get your balance paid as quickly as possible:
- Make lump-sum payments. If you have some extra cash to spare, consider putting a lump sum toward your loan. There is no penalty for making extra payments toward your principal balance.
- Increase your payment amount. If you can't make a lump-sum payment, consider simply increasing your monthly payment. Most lenders allow you to designate a portion of your monthly payment to go toward the principal balance.
- Practice biweekly payments. Rather than making one monthly payment, consider making one half payment every two weeks. This strategy is based on 13 biweekly payments instead of 12 monthly payments. This helps reduce the interest paid on the loan.
- Create a budget. The key to any financial plan is to create and stick to a budget. Make sure you set aside money for your loan every month so that you can get closer to achieving financial freedom.
The Joy of Financial Freedom
Achieving the goal of becoming mortgage-free requires discipline and proper financial planning. But, in the end, it is well worth the effort. Being mortgage-free and debt-free provides a tremendous amount of peace of mind and lays the foundation for future financial success.