Biscotto Team

Bringing Dreams to Reality

  • Home
  • About
    • About Us
    • Disclosures
  • Our Team
  • Resources
    • First Time Buyer Tips
    • First Time Seller Tips
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Loan Programs
    • Loan Process
    • Mortgage FAQ
    • Mortgage Glossary
  • Calculator
  • Blog
  • Contact Us

How To Pay Off Your Mortgage Early: 4 Methods That Work

May 13, 2020 by Biscotto Team

How To Pay Off Your Mortgage Early 4 Methods That WorkWhile a mortgage is a necessity for many people who have the dream of owning a home, it is also a form of debt. Most people do not like owing money to someone else. Therefore, homeowners might be looking for ways to pay off their mortgage early. The reality is that people are charged interest for having a mortgage. If a mortgage is paid off early, this is less money than the bank will take and more money in the pockets of homeowners.

There are a few methods people can use to pay off their mortgage early.

Make Extra Payments

At the beginning of a mortgage, the vast majority of the money that people send the bank goes toward interest. In the end, most of the payment covers the principle of the loan. If someone is willing to make extra payments, these added payments are going to directly attack the principle. When the principle shrinks, there is less interest that accrues. Making extra payments is the most direct way to attack a home loan and pay it off more quickly.

Refinance The Mortgage

Another option people should consider is refinancing the mortgage. Essentially, a homeowner takes out a second home loan that pays off the first home loan; however, the new home loan has a lower interest rate. This may allow people to pay off the loan more quickly. Furthermore, people can refinance to a shorter-term, allowing them to pay off the loan more quickly.

Recast The Mortgage

Recasting the mortgage is a little bit different than refinancing. In recasting the loan, people throw a lump sum at the principle in exchange for a new amortization schedule based on that lump sum. This means that people will have a new schedule that reflects the principle that is left, often resulting in a shorter payment schedule.

Split The Monthly Payment In Two

Finally, many people are paid biweekly. Therefore, it might be easier for people to pay their mortgage biweekly. If someone pays their mortgage biweekly, they are making 26 half-payments per year or 13 monthly payments per year. The effect is that someone makes one extra monthly payment per year. This payment attacks the principal directly, helping people pay off their mortgage faster.

Biscotto Team

Filed Under: Blog

The Biscotto team logo
Vinny Biscotto

WANT TO BUY A HOME?

NOT SURE WHERE TO START?
Talk to Vinny!

Vinny Biscotto is your dedicated mortgage loan originator.

Vinny Biscotto


CALL (817) 714-5090

NMLS #1577299

APPLY WITH VINNY  
GET A RATE QUOTE  

Connect with Me

How can I help?

  • This field is for validation purposes and should be left unchanged.

Browse articles by category

Archives

Quick Links

  • Accessibility Statement
  • Privacy Policy
  • Disclosures
  • Blog
  • Contact Us
Equal Housing Lenderv NMLS ID 806183
NMLS Consumer Access
equal housing lender

Our Location

1240 Southridge Court #104
Hurst, Texas

Copyright © 2023 · Powered by MySMARTblog

Copyright © 2023 · Genesis Sample Theme on Genesis Framework · WordPress · Log in