Mortgage loans can be very challenging to pay off, especially if you are having trouble with your finances. Though it may seem like your mortgage payment will never disappear, it is completely capable of happening. In order for you to get rid of your biggest debt, you may want to consider some of these tips below:
1 – Assess your finances. Take a look at your current financial standing. You can do this by checking your investments, savings, total income, and other related accounts. Then assess your situation.
By doing simple things like creating a monthly budget, we can see where all our money is going and how much we have left over to put towards our mortgage. From there, you can start making the necessary steps to pay off your mortgage loan. This step is very crucial before anything else.
2 – Avoid unnecessary expenses. As much as possible, avoid spending money on items which you don’t really need. Unnecessary expenses will just eat up your savings and keep you from paying off your mortgage early. Try to cut down on your expenses without sacrificing your needs. For example, try to limit your vacations and the amount of money you spend on leisure and entertainment.
3 – Calculate your debt to income ratio. You can do this by computing the percentage of your income being used to pay off debts. Then divide the sum of your monthly expenses or payments plus your mortgage by the total net income (monthly) and multiply by 100. When you have a debt to income ratio higher than 50%, most lenders would reject you because you don’t have the financial capacity to pay meet your financial obligations. Take note that you can speed up your mortgage payment if your debt to income ratio is higher than 50%.
4 – Pay your loan with huge lump sum payments. You can opt to set aside short term savings by paying your mortgage loan early through large, lump sum payments. Or you can use your extra income from other sources to augment your payment. Just be careful with your budget though. Make sure you still got enough money in case of emergency situations such as illness or deaths in the family and other related circumstances.
As you can see, there are some simple ways to pay down your mortgage early. Since your mortgage is usually your largest bill, it will take time to pay off, but the more aggressive you are with paying it off, the more money you’ll save in the long run and the less stress you’ll have!
Paying off our mortgage early is a goal we all have, but in order to get there, we must have the discipline and motivation it takes in order to do so. By avoiding unnecessary spending and doing things like creating a monthly budget, we can increase our chances of paying off our mortgage early and also have a plan for doing so.
About the author: This is was provided by FindSecuredCards.com. There, you can find tips for paying off your mortgage early as well as tips on creating a budget.
Credits: Image courtesy of Svilen Milev.