Many people that are seeking to get out of mortgage debt as quickly as they can often have a few options. Homeowners often fail to realize that the typical 30-year fixed rate mortgage, while it may come with a low monthly mortgage payment, can end up costing you much more over the life of your home loan.
An alternative is the 15-year fixed rate mortgage, which comes with an interest rate that is often lower than a 30-year fixed rate mortgage, for homeowners who qualify, and can cost you a lot less over the repayment period. Many homeowners feel that the 15-year fixed rate mortgage is not the best option when it comes to owning a home as the monthly mortgage payments are often higher.
However, the 15-year mortgage, again, we’ll get you out of debt faster and at less of a cost when interest is factored in, so homeowners that may be able to afford the higher monthly payment that comes with this loan may benefit in the long run.
Another way of simply getting out of mortgage debt faster is to pay more than the minimum monthly payment on your mortgage. While this may seem simplistic, or for some homeowners it may be unrealistic, when paying more on your home loan the extra money will go towards the principal payment. Typically, the majority a homeowner’s first few years of payments will go to pay interest, which will cost more the longer your mortgage term happens to be, so any extra that you can pay will be beneficial.
Homeowners who are simply paying more on their mortgage payment need to check with their lender to see if there are any fees that may be levied for early payment. Some mortgage lenders will charge a homeowner a fee if they pay their mortgage early, so you’ll need to see if there is a penalty and if so, are you able and willing to pay.