Many homeowners are becoming more aware of their debt and the benefits of paying off their mortgage as quickly as possible. Obviously, it’s beneficial for some homeowners if they are able to own their home outright rather than to continuously make monthly mortgage payments for years down the road. Some homeowners are seeking ways in which they can get out of mortgage debt quickly, and while there are a few options in this area, homeowners need to make sure that their individual financial situation is such that using these methods will be helpful.
Some homeowners who have, for instance, a 30-year fixed rate mortgage will simply pay more each month on their home loan payment. Usually, the bank will apply any amount over the minimum monthly payment to the mortgage principal, which can help a homeowner get out of debt years ahead of schedule. However, there are some lenders who may charge a fine if a homeowner pays off their mortgage early.
Other homeowners have chosen to either refinance or obtain their home loan in the form of a 15-year fixed rate mortgage. Depending on the homeowner’s situations, a 15-year mortgage can come with a lower mortgage interest rate and, obviously, a homeowner will get out of debt in a timelier manner than if they had chosen the common 30-year fixed-rate mortgage. Also, a homeowner stands to save a great deal of money due to the fact that this mortgage has a shorter timeframe and interest will not have as much time to build on the principle, which can make the home less expensive overall. It should be known though, that the monthly mortgage payments on a 15-year fixed mortgage are often higher than those on the 30-year mortgage.
Any homeowner who simply wants to get out of mortgage debt quickly may benefit from talking with their mortgage lender or a financial advisor before making a decision on what mortgage to obtain on their new home or when they want to refinance. Yet, it comes down to a case of affordability when choosing a plan for getting out of mortgage debt fast. Some homeowners can afford a higher monthly mortgage payment, which would allow them to get out of mortgage debt quickly, while others may be unable to do so and will therefore have to opt for a mortgage that will allow them to simply keep a roof over their head.