How to Payoff a Mortgage in Less Than 10 Years
The seemingly ambitious goal of paying off your mortgage in less than 10 years is attainable. With a thoughtful home purchase or refinance, flexible income and savings plans, and an organized approach to staying ahead of your finances, mortgage-free homeownership is a realistic objective worthy of pursuit. Whether you have plans of purchasing a new home in the future, hope to live a stress-free retirement, or would just like to get that mortgage payment behind you, here are a few simple strategies to consider if a mortgage-free home in a decade or less is the goal.
Buy a Home That is Less Than You Can Afford
A home that you can easily afford is a home that you can easily pay off. If your total monthly income comfortably surpasses your mortgage payments, contributing extra cash to your outstanding balance will never be a problem. Along with being able to contribute additional principal each month, you can’t put a price on the reduced stress that comes with a home you can afford.
Consider Refinancing Your Current Home
Accessing lower mortgage rates is one of the easiest ways to boost your long-term payoff potential. A 1-2% interest adjustment can translate to thousands of dollars saved throughout your loan. You can access 10-year fixed-rate loans, low-cost adjustable-rate loans, and may be surprised to discover some significant savings after you crunch the numbers.
Take Advantage of Underutilized Space at Home
Thanks to rent sharing and other versatile platforms like Airbnb, it’s easier than ever to get ahead of your mortgage with the help of some friendly travelers or local renters. Whether you have a spare bedroom after your kids have left for college, or you’ve transformed your man-cave into a welcoming guest suite, the options are limitless when it comes to turning your underutilized space into a beneficial financial gain.
Prioritize High-Interest Debt First
If you’re hoping to respect your 10-year mortgage-payoff plan, make it a priority to eliminate financial drains like high-interest credit card debt, student loans, or auto loans. With typical rates of 20% or higher on many credit cards, you can’t afford to leave any high-interest balances left unchecked. Once you’re liberated from any high-interest constraints, you’ll be free to focus your financial efforts on proactive home payments.
Make Bi-Weekly Mortgage Payments
This little mortgage hack is a well-known secret among savvy spenders hoping to pay off their principal in less time. By voluntarily making bi-weekly payments, you end up making an additional payment over the year. You may not notice the difference in your monthly budget, but you will notice the difference once you’ve achieved your goal of paying off your mortgage in a decade or less!
Want to discover other helpful mortgage tips? Check out the free resources at Home Backer USA to learn more.