If you can afford a slightly higher monthly payment, do it! A great place to start is to divide your monthly payment by 12 and add that amount to your monthly payment. This results in 13 payments in a matter of 12 months. By paying down the principal as you go, you'll not only pay off your mortgage faster, but also save money on the interest. However, before making any extra payments, talk to your mortgage lender at the Lake of the Ozarks to make sure the extra payment is being applied to your mortgage properly. Then always check your next statement to ensure that money has been properly applied. Also, make sure that there aren't any penalties for paying off your mortgage early. This is probably the most simple way to pay off your mortgage faster, as long as you stick with it. However, if you don't have the extra money one month, you're not locked in to paying it.
2. Refinance to a Shorter Term.
Another option would be to refinance your Lake of the Ozarks mortgage loan to obtain a shorter term. If you have a 30-year loan, talk to your lender about refinancing into a 15-year mortgage. Not only will this help you pay off your mortgage faster, but you'll also save on interest. In fact, shorter-term mortgages often carry interest rates 1/4 of a percentage point to 3/4 of a percentage point lower than 30-year mortgages. Keep in mind that with this option, it's like getting a new mortgage. You will have extra paperwork and there are closing costs involved. Before making a refinancing decision, be sure to do the math to determine if the savings outweigh the upfront costs of refinancing. This option is a lot less flexible than just paying extra each month; if you decide you don't have the extra money one month, you're still locked in to that higher payment.
Maybe you don't have enough extra income each month to increase your monthly payments. Do you get bonuses at work though? Did you get a large tax refund? Any extra large sums of money that you get can easily be applied to your mortgage to help pay it off faster. This option allows you pay extra only when you have extra available. You don't want to be struggling financially because you want to pay off your mortgage faster. There needs to be a balance in what you can afford. The only downside to this option is that the payments are irregular and therefore, it's hard to determine a pay off date. You also want to make sure that you don't throw too much of that extra money at the mortgage. Be sure to save some of it back in an emergency fund.
For all your mortgage loan questions, I'm here to help. As your lender, I'll discuss your Lake of the Ozarks home financing options, offer competitive interest rates and back it up with the first-class service you deserve. For all your Lake of the Ozarks home loan needs, give me a call at 573-746-7211.
For Lake area news, resources and tips on financial services, please
Senior Loan Officer
NMLS #: 493712
4655 B Osage Beach Parkway
Osage Beach, MO 65065
Cell: (573) 216-7258
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.