5 Ways to Pay Off Your Home Faster

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5 Ways to Pay Off Your Home Faster

Image Courtesy of Life and My Finances

Many people want to pay off their home and get out of debt. However, the vast majority of people struggle to balance their income and expenses each month. A recent study indicated that millions of Americans could not survive a financial emergency.

There are proven methods to pay off a home quickly. By following these steps, a person can drastically improve their financial situation.

15 Year Mortgage

Getting a mortgage with a length of 15 years is ideal for paying down the loan quickly. Most people opt for a 30-year mortgage to have a smaller monthly payment. However, with a 30-year loan, a small percentage of the monthly payment goes towards the principal balance.

A borrower will save tens of thousands of dollars in interest by choosing a shorter loan term. A 15-year mortgage generally has lower rates of interest as well.

Live on a Budget

(Image Courtesy of Elevate Home Mortgage)

Living on a budget is critical to reaching any financial goal. Many people struggle to balance their fiscal needs each month. A budget allows a person to analyze where their money is going. When first starting a budget, some people are shocked to learn how much they spend on specific categories. For example, going out to eat a few times each week can add up to hundreds of dollars each month.

Refinance

A refinance can make sense in certain situations. If the mortgage interest rate is drastically higher than prevailing interest rates, refinancing can significantly reduce the monthly payment. When refinancing, it is also possible to reduce the loan term to pay down the mortgage faster. Work with a local bank to discuss the best options. As interest rates rise, refinancing will become a less viable option for many people. Researching for credible lending sources, you can try to qualify for a personal loan. There are many types of loans such as a VA loan that could be helpful in trying to pay off your home faster.

Sell Extra Things

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Most people have too much clutter. Clean out your house or decide which of your valuables you’ve been storing you can part with in order to get a little bit more money to put towards your mortgage. By selling extra things around the house, people will have additional cash to pay down the mortgage. Reducing clutter also helps people feel more relaxed around their home. With online selling options more available than ever, this is an easy way to make some extra money to reduce debt.

Sell the Home for a Smaller One

Although no one wants to sell their current home, sometimes it is the best financial decision. Moving into a less expensive house is an excellent way to pay the mortgage off faster. With the cost of selling a home so high, this should only be considered in certain circumstances.

Mortgages are necessary for buying your home, but that doesn’t mean that you have to be stuck with payments for the whole life of the loan. Use these tricks to get ahead on your payments and get out of debt sooner. Just make sure you do your research before you sign anything.