Friday, December 5, 2014

5 Tips to Paying Off Your Mortgage Faster

Your home is typically the most valuable asset you have, while your mortgage at the Lake of the Ozarks is often your largest debt. Depending on the terms of your loan, you are adding thousands of dollars more to the price of your home. The faster you can pay off your Lake of the Ozarks home loan, the more money you're going to save. Not only will you no longer have the burden of that huge monthly payment, but you'll have security in owning your own home. Here are several great tips to help you pay off your mortgage faster!

1. Pay a Little Extra Each Month. 

Try to add a little extra to each payment you make. Whether it be $10 or $100, choose what you can comfortably afford because every little bit helps. Use a mortgage calculator to see how adding just a little to your payments can save you money in the long run. When you pay extra, make sure that it is being applied to your principal and not set aside for the next month's payment. By paying down the principal, the amount that your interest is calculated on decreases. You should also check your contract before making extra payments, as some have prepayment penalties.    

2. Pay Every Two Weeks. 

Rather than making one payment a month, consider paying biweekly. This method of payment takes advantage of the fact that there are 52 weeks in a year and only 12 months. When the year is over, you will have made 26 half payments, which is the equivalent of 13 full monthly payments. Check to see if your bank will set up a biweekly payment plan. Some will do it for free and some will charge you for it. Be sure to have the bank credit the extra payments toward the principal so you save more on interest; some banks will hold the extra payments until the end of the year and therefore, your still paying interest on that amount.

3. Apply Any Extra Cash You Get.

Tax season is a great time to reduce the principal on your Lake of the Ozarks mortgage. Consider applying your next tax return towards your mortgage principal. If you receive any other larger sums of money throughout the year, maybe as a Holiday bonus at work or a commission check, consider applying those amounts to your mortgage principal as well. The more you can pay upfront, the more you'll save in the long haul and the faster you'll be able to pay your home off.

4. Refinance Your Home. 

Refinancing your home at the Lake of the Ozarks to either lower your interest rate or shorten the term of your loan is another great way to get your home loan paid off faster and save money. If you have an adjustable rate loan, you can refinance to get the comfort of the stability that a fixed rate loan offers. Depending on what interest rates are available, you may be able to get a 15 year loan for a little more than what you currently pay for a 30 year loan.

5. Downsize Your Home. 

If you are struggling to pay off your mortgage, one of the simplest solutions is to downsize. Do you really need 2 spare bedrooms or that extra office space? While having a nice big spacious house is something you've dreamed of, think about how much more enjoyable life could be without all that debt hanging over your head. If your near retirement age or approaching an "empty nest," downsizing makes the most sense. In this economy, it's great knowing that your home belongs to you instead of the bank.

As your Lake of the Ozarks mortgage lender, I will work with you to figure out the best way to pay your mortgage off faster. For all your home loan and refinancing needs, contact Lake Lender Michael Lasson at 573-746-7211.

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211

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