The idea behind paying down a mortgage
Paying down your mortgage is a central factor of financial planning.
13:53 17 December 2013
Your mortgage is one of your most expensive debts. It is also something that most people want to pay off as quickly as they can to make things easier later.
There are numerous benefits to eliminating your house payment. As it is generally the most expensive monthly bill you have, paying it off can free money to do anything from saving more for retirement to diverting funds to pay off high interest credit card debt.
Paying of a mortgage can be easy; there are a few simple things you can do to pay it down.
- Make sure that you can make extra payments to your mortgage without additional fees. Some lenders and agreements will state that you are not allowed to pay more than your monthly amount and you cannot pay it off early without a substantial fee.
- Keep an eye on your interest rates. Maintain good credit. If better interest rates or terms come up think about refinancing your mortgage to get hold of a lower rate.
- Create a budget. If you want to pay your mortgage down first then you may need to rearrange your finances so that you can divert more money towards eliminating this expense.
- Eliminate unnecessary expenses. While you may have to pull in the belt when it comes to spending for a while, you can often save hundreds of pounds a year. If you divert all of this to paying off your mortgage, you can cut years off its life.
Getting a mortgage is a huge step in anyone’s life. It is an even bigger step to pay it off.
Take the leap and do what you can to eliminate this expense and see what kind of financial freedom it can bring you. Just create a budget, do what you can to lower your interest rates, and be willing to pay more than your monthly payment.