While buying the perfect home can be a dream come true, paying for the mortgage that might come with it can be a very daunting task, especially if you need to settle hundreds of thousands of dollars’ worth of debt. Still, that doesn’t mean you won’t be able to take it on. Below are five tips that will help make paying off your house a bit easier.
Organize Your Budget
First things first: You need to set aside money for your mortgage payments. This might seem too obvious for you, but you’d be surprised at the number of people who failed to do this and paid for the consequences. Most people take budget planning for granted, never understanding why they should do it as well as missing out on the rewards it could bring them. Don’t be like those guys.
Save the Date
You probably don’t need us to tell you this, but you also need to make sure you’re well reminded of the date of the mortgage payment. Do whatever you have to remember that day. Jot the date down on your calendar, save it on your phone, and even set an alarm clock on that day (with at least ten snoozes). Remember that being late in making payments can incur some penalties, although there is a standard 15-day grace period (This varies from one lender to another, so you need to check it, too!).
Minimize Other Expenses
You need to cut down on some of your other expenditures as well. This includes luxury items such as cigarettes, beers, chocolates or some other things not considered as real necessities. If you want to settle your mortgage debts on time or earlier, you need to make certain concessions. And no, we’re not telling you to eat less and walk to your office just so you can get that condo in Tagaytay or that flat in Cincinnati, Ohio. We’re saying you should live as frugally as you can while you’re still paying off your house.
Before You Continue
While the first three tips will help you make your mortgage payments on time, the last two tips below would help you settle it earlier and perhaps even save you some money along the way. So if you want to know how that can be done, then you may proceed.
Pay Every Fortnight
Instead of making one full monthly payment, you should instead pay half your mortgage bills every two weeks. That way, you’ll be able to pay an extra month’s worth of mortgage fee per year. Think about it. If you pay once a month, you’ll have to make 12 payments within a year. But if you do it biweekly, you’ll be able to make 13 (There are 52 weeks in one year. Do the math!). This not only lets you pay off your debt earlier, but it can also save you a significant amount of money (Most mortgages come with interest rates).
Make Extra Payments
You do this either by paying extra for the principal amount only or by using every bonus cash you get to shave down your overall mortgage debt gradually. Reducing the principal amount of your mortgage helps minimize the interest rate and lets you settle the entire debt earlier. Even if your extra payment is little, it will eventually add up. And don’t worry about finding money lenders; lots of them will allow you to make an additional payment and mark it as “principal only” (i.e., the amount without the interest).
Using your windfalls to mitigate your mortgage expenses can help you settle it sooner as well. These bonus cash usually comes in the form of tax returns, salary bonuses, and gifts from relatives. But you can also use the additional income you may get from a raise to accelerate paying your house off. Since you’re not used to having that extra money yet, you won’t even miss it.
Settling your mortgage can really be a pain in the neck. But by following the tips laid out above, you’ll be able to pay it off in time― if not sooner!
But how about you? Got any ideas on how to pay for mortgages on time? Got any tales about your mortgage experience that you would like to tell us? Share them in the comments section below!