One of the biggest commitments you will ever have to make is the Financial one! And the mortgage is no other. It is observed that it takes about 20-30 years to finish your mortgage loan but who wouldn’t want it to end sooner?
The faster you get mortgage-free the more you will save thousands of dollars in interest, and you’ll be free! So, in this blog, we will discover how you can achieve that and what to do in case of any mishaps.
Why Should You Pay Off Your Mortgage Faster?
It’s not just about owning your dream home but also about having your financial freedom. And speeding up the process can be a game-changer.
Let’s see how:
Save Thousands of dollars: The longer you take time to repay the amount, the more interest goes out.
Increase home equity faster: Most of the amount goes towards owning your home and less in the interest. So, it’s not just covering the amounts!
Peace of mind: Once you are financially free, you will have more security, and much more peace of mind to focus on other aspects of life.
More investment opportunities: Freeing up your cash flow allows you to invest in other wealth-building opportunities.
Now that we have understood why is it important to pay off your mortgage faster, let’s move on to how can we achieve it!
How can you pay off your mortgage faster?
- Make Bi-Weekly Payments: You can change the course of payments and instead of paying monthly, split them into 26 bi-weekly payments. This results in an extra full payment annually!
- Increase Your Monthly Payments: Even small increases, like rounding up your payment, can make a big difference in the long run.
- Make Lump Sum Payments: If your mortgage terms allow, use work bonuses, tax refunds, or extra savings to pay down your principal.
- Choose a Shorter Loan Term: If possible, opt for a 15 or 20-year mortgage instead of 30. Higher payments, but significant savings on interest.
- Refinance for a Lower Interest Rate: A lower rate means less interest and more going towards your principal.
- Avoid Unnecessary Debt: Reducing other high-interest debt (like credit cards) frees up cash to put toward your mortgage.
Let’s say you tried to follow the above pointers and stay on track. But somehow, miss a payment or two. What to do now? Don’t worry I’ll tell you how to deal with that situation.
What Happens If You Can’t Make Your Mortgage Payments?
There might be some unexpected hurdles like loss of job, or unplanned expenses, and it could be hard to keep up with the payments in this growing economy. If that is the case, here’s what you can do:
Ignorance is Not Bliss: Missing payments can lead to penalties, increased interest, and even foreclosure.
Talk to Your Lender ASAP: Most lenders have options like deferred payments or modified terms to help you stay on track.
Refinance: Lowering your interest rate or extending your loan term can ease your financial burden.
Get Government Assistance: There are programs available in Canada to help homeowners in financial distress.
How to Keep Things Running Smoothly?
Owning a home should not feel like a burden, it’s a journey to your dream home, make it a memorable one! With the right strategy, you can manage it efficiently and pay it off faster. Having a professional by your side ensures you’re making the best financial moves.
That’s where I come in! I’m Gunneet Singh, and I specialize in helping homeowners navigate the mortgage process, from securing the best rates to developing smart repayment strategies. Whether you’re buying, refinancing, or looking for ways to become mortgage-free sooner, let’s make it happen together!
Let’s talk! Reach out today and take control of your financial future!
