4 Options for Paying Off Your Mortgage Early

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Living with a mortgage may become stressful for you after a few payments. It sometimes restricts your finances and stops you from making more profitable investments.

 

If you pay your mortgage early, you’ll free up some of your funds. The money you reserved for mortgage payments could be used for your other financial activities. 

 

Paying off your home loan is the best option if you have already figured out ways to do more income-generating activities. Anyway, there are many options to choose from. They are your ticket to paying off your indebtedness at the earliest opportunity possible.

Some Options To Pay Off Your Mortgage Earlier

  1. Take Out A Mortgage Retirement Loan

A mortgage retirement loan will help you terminate your existing loan early. The scheme is a pay-off-early mortgage loans facility given to select and qualified individuals 62 years and above. It’s one way to consolidate loans or pay off existing debt.

 

Sometimes called a reverse mortgage, it’s where you can borrow funds based on your home’s equity. You may avail of it and fully pay your existing loan. Since you no longer have monthly payments to attend to, you can start working on your retirement financial goals. 

 

Your reverse mortgage, like any loan accommodation, does accumulate interest. But mortgage repayment will be made when you sell your house, move out, or pass away. After paying off the retirement loan, any remaining amount belongs to you or your heirs.

  1. Cash In Some Properties

If you have other properties that may no longer give you some cash, it’s better to sell them off. Cashing in some non-performing assets will free you from some of your financial burdens, like your existing mortgage.

 

Sometimes, properties that are not generating income are the ones with the most operating and maintenance costs. They often drag your finances down. So, they’re better off sold so you can use the money to pay off your mortgage early. 

 

It’ll then free up some funds to plan for other worthwhile investments and bring in more income for your other financial needs. 

 

  1. Terminate Some Investments

If you have other investments that are no longer profitable than they used to be, maybe it’s time to let go where you can still get cash from them. When an investment or business is dying, it’s better to cash in while you still can than leave all of it to losses.

 

Cashing in a dying investment to pay off your loans can help you plan for more promising income sources later. You can make other profitable investments after you pay off your existing mortgage and use the freed monthly amortization payments for them.

 

You’ll also enjoy a reduction in your interest payments if you terminate your loan earlier, which reduces the total amount of loan to be paid if you make a lump-sum early repayment.

  1. Refinance To Short-Term Loans

Home mortgage terms usually go up to 30 years of paying time. Availability of a short-term refinancing, like 15 years or less, will give you an earlier period to pay off your financial burden. Some people find it more reasonable since you’re still younger and can take on more jobs and economic activities to meet your needs.

 

Though you can expect higher principal repayments, you could negotiate for lesser interest rates in short-term financing. The earlier you pay off your mortgage, the better for your future. You’ll be financially able to plan for a more comfortable retirement age. 

The Bottom Line

Making early repayments on your home mortgage frees you up financially. It eases your mind of monthly worries whenever a repayment schedule knocks on your door. There are more options for making early payments on your loan, like taking in more paying jobs and making weekly payments. 

 

Whatever you think best applies, the four options in this content will help ease your mortgage burdens. Also, check out the links for more tips and tricks toward financial freedom.