Step 3: Check with Your Mortgage Company
Before you make any rash decisions on paying loads extra to cut the years on your debt, run it by your mortgage company first to make sure you will not get hit with any fees or setbacks. Some mortgages are not able to pay off early and you will wind up paying more than just the initial interest in penalties! Some companies could charge you thousands of dollars extra if you try to pay ahead of time. This is mainly because they will be losing extra interest if you pay off the principal early.
Step 4: Make That Payment
If you have done all the above steps, it is now time to make that payment! In this step, you want to specify extra clearly that your extra money is to be used towards the principal. This will ensure that the mortgage company doesn’t use the extra money towards future interest, but for lowering that whole bill! If you do not have any extra income for the payments, you can always use the extra income to pay towards the principal.
This could include promotional money, gift money, or cut something out of your life and use the money you would typically use to pay for that, towards your mortgage. It is also a possibility to refinance your mortgage, but if you want to do that there are other routes you must take and it is best to speak to a financial advisor.
If you want to take things into your own hands, the above 4 steps are your best options for owning your home faster and avoiding interest better.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
