3 Tips for Paying Off a Mortgage Early

With interest rates at all-time lows and inflation heading for the skies by most accounts, most experts agree that now is probably not the time to pay off your fixed-rate mortgage. However, many homeowners are eager to shed this monthly payment that generally takes the biggest bite out of the monthly budget. If you believe that paying off your mortgage fast is the right financial decision for you and your family, check out these tips to make sure that your money goes where you want it and does the best work possible on decimating your mortgage debt:
1.Look for Hidden Fees
It may be tempting to start paying your mortgage twice a month or just adding a little bit over the monthly payment to be applied to the principal. However, if you don’t clear this with your lender and read the fine print carefully, those extra dollars could go to processing fees instead of toward the balance of your loan. Some lenders may charge hundreds of dollars if you begin paying twice a month on a monthly mortgage.
2.Track Your Payments
Whenever and whatever you pay needs to be clearly recorded and marked on the payment every time you do it, and you need to follow up on each additional payment to make sure it was applied properly. Particularly if you are not paying the same amount every month, you need to follow up each month to make sure that the extra money you sent was applied to your principal and not just forwarded to diminish next month’s amount owed.
3.Consider an Annual Lump-Sum Payment
Consider saving money in a specially-marked account and making one large payment toward your principal once a year. This keeps the money where you can access it for emergencies in the interim and may help you avoid additional processing fees. Remember to read the fine print here, also, however! Some lenders consider large, one-time payments to be subject to prepayment penalties even if you are not paying off the mortgage in full.

Do you think it makes sense in today’s market to pay off your mortgage early? Under what circumstances would you do so?

*God Speed*
TLD Investments LLC


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