Did you know that in Scotland, home owners paint their front door red when they pay off their mortgage?
Seems kind of ironic given the saying that if you owe money you are in the red!
In the US, nearly 30% of homes are paid off. This may be hard to believe for some since it seems like nearly everyone that you talk to pays a mortgage each month. It’s difficult to imagine for some but the benefit of owning your home outright can be enormous. Just think, instead of paying the bank each month, you could spend it on lavish weekends away, buy that new Porsche, or even do something crazy like save or invest it!
But wait! If I told you there was an easy way to pay off your mortgage early, would you do it? I suppose that’s a personal choice but I at least want to help you to understand that it’s possible and not all that painful.
Easy way #1: If you get paid bi-weekly, you may want to consider paying half of your mortgage payment out of each of your pay checks. By doing this, you’re actually making an extra payment each year. Magic you say? No, just math – there are 52 weeks per year. If you make a half payment every other week, that means you would be making 26 half payments per year, which is the same as making 13 payments once per month. Most mortgage companies charge daily interest so just by making each half payment early, you will save on interest and you will knock a considerable amount of time off your mortgage, like years!
Easy Way #2: Add a little extra to each payment. A little each month can really add up. If you have a $100,000 mortgage at 4% on a 30-year fixed rate and you pay $100 extra each month, that will knock off as much as 8.5 years from the end of your mortgage. That’s 28% quicker than if you just make the regular mortgage payment. And, that savings is mathematically GUARANTEED!
Easy Way #3: Refinance your 30-year fixed to a 15-year fixed rate mortgage. This one may not be quite as easy as the others but it is extremely effective. You will pay more each month, but you will save in 2 ways. The first is that by paying off the loan in 15 years instead of 30, you will pay the same amount of principle but will save thousands simply because it’s not borrowed for as long. The bonus to this strategy is that the interest rate on a 15-year mortgage is typically less than on a 30-year mortgage saving you even more.
No matter which method you choose, having a paid off home mortgage will give you comfort and security beyond the monetary savings that is absolutely priceless. Helping YOU is What We’re Here to Do!