One of the first things a new homeowner thinks about when they get approved for their loan is – how can I pay this mortgage off faster? This thought is universal because for the first half of a mortgage’s life, very little of your mortgage payment actually goes toward the principal of the loan; it almost all goes toward interest. Therefore, a new homeowner will have to wait years before they actually see their loan amount start dropping on their mortgage statements. But, there are several things you can do to help pay your home off quicker than if you simply send in the required monthly payment every month. Of course, every way requires using additional cash, so here our builders in Southport NC share six simple sources of cash that you can use to help reduce the amount of time you spend paying for your home.
#1 – Your Annual Bonus
Does your employer give you an annual bonus? If so, apply the bonus, or a portion of it at least, to your mortgage’s principal. In just a few short years’ time, you can make a substantial dent in your mortgage balance and this will help you pay the loan off quicker.
#2 – Windfall Money
Did you recently receive an inheritance? Win the lottery? Have a good day at the races? Receive investment earnings? These types of funds are considered “windfalls” because they are sources of unexpected money. Since the money was unexpected, you might as well use it, or a portion of it, to help reduce your mortgage principal. Your loan will get paid off quicker and you won’t suffer as a result because you weren’t expecting the money anyway.
#3 – Bond Earnings
If you play the investment game and you are receiving earnings from bonds or CDs, then instead of reinvesting the money, you can put the funds toward your mortgage principal so it can be paid off faster.
#4 – Tax Refund
If you get a healthy tax refund every year, then this can make for an excellent addition to your mortgage payment. Think about it – if you get an average tax return of $4,000 every year, that’s $40,000 going directly toward your principal over just ten years’ time.
#5 – Make a Double Mortgage Payment Four Times a Year
If you can swing it, double up on your mortgage payment four times a year. Before you begin, ask the mortgage company for your balance. Then, after your four double payments, ask the bank for another balance report. You’ll be amazed and inspired to see your principal amount falling faster than expected.
#6 – Pay a Set Amount Over Your Mortgage Payment Every Month
Paying just $10 or $15 over your monthly mortgage amount each and every month will add up and significantly help reduce the number of years you have to pay for your home. The reason is because anything you pay over the monthly amount is applied to the principal of the loan.
Shopping For a New Home? Visit Trusst’s Builders in Southport NC Today
If you’re in the market for a new home, Trusst Builder Group’s builders in Southport NC have homes available in a number of the area’s top-rated communities. Or, if you prefer, can design and build the custom home of your dreams on the land of your choice. Visit Trusst Builder Group today or call us at 910-371-0304 to schedule a consultation with one of our custom home designers.