Thursday, 10 November 2011

0 Why Pay Of Your Mortgage Earlier?

There are many reasons why you should pay off your mortgage earlier than you have to. Consider it a wise investment in your future. By paying extra on your loan, you will slash a huge amount of interest from what you pay overall. This is especially true if you start making those extra payments early. That is when the majority of what you pay in each month is going to primarily to interest.

When you pay off your mortgage, just think about how much extra money you will have each month. That money can be used to pay down other debts. It can also be used to put into savings or retirement accounts. It is like paying yourself for a change and that is something that we can all smile about.

Another place you can save is with the insurance on your home. The amount you pay is based on what you owe. When you pay down that balance, you can start to see your premiums dropping too. That is again extra money that you can use to pay more on your mortgage.

Your credit rating is very important, and when you pay off your mortgage early it reflects there. You will be seen by creditors as responsible and someone that they can extend credit to. They will also be more likely to extend you a very low rate of interest along with it.

The rate of foreclosure is very high and that is due to the economy. Those that paid off their mortgage early have been able to keep their homes in spite of a reduction in income. Many feel that if they had only paid the bare minimum on it then they wouldn’t have been able to get through it.

The cost of being able to retire is higher than ever before. Many people worry that they aren’t going to be able to make it in those golden years. By paying your mortgage earlier though you will be able to own that home. It will be yours and you can use it to live in for the remainder of your days. You can also borrow against your home equity if you should have a financial need.

You may be saying you really can’t fit paying more on your mortgage into your budget. However, if you take a close look at your spending, you should be able to find at least $50 per month extra you can allocate for it. That adds up to an additional $600 a year just by cutting out a few non-essential items.

If you get paid every two weeks, there will be a couple of months out of the year when you get a third check. Use at least half of that extra check to pay extra on your mortgage. If you get a bonus for work at any time in the year, use at least half of it to pay on your mortgage. Should you get an income tax return, you should take a good portion of that additional money and pay down the principle on your mortgage loan.

If you want to get a FNB home loan then visit the author’s home loan site at


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