Many homeowners fail to realize that on many mortgages, like a 30 year fixed-rate mortgage, a low monthly payment may be available but they may be paying more over the long run when interest and the life of the home loan are taken into account. While it may sound like common sense, paying more on one’s mortgage principal may be beneficial for anyone looking to get out of mortgage debt as quickly and cheaply as possible.
Mortgages like a 15 year fixed-rate mortgage often come with a low interest rate and can cost less over the life of the loan. However, many people do not take this option because it comes with a higher monthly mortgage payment. For anyone who wishes to be rid of their mortgage debt faster and pay less money overall on their home might want to look into a 15 year fixed-rate mortgage and see if it’s an affordable option for them.
However, no matter what type of mortgage you have, paying on the principal amount is going to be more beneficial than just meeting the minimum payment each month. Paying down the principal is going to make the amount on which interest can be charged smaller, so a homeowner will save money over the life of their home loan.
It should be noted though, some mortgage lenders will charge a fee if you pay your mortgage early. While this may be a small amount or a substantial amount, depending on your financial situation and the amount that is charged, but you may still want to research if your lender will charge a fee for early payment. It may pay off in the end, however, even with the fee, if you are able to get out of mortgage debt in a timelier manner at less cost to you.