When you make a higher payment than you should each month your balance goes down even more. That means by making extra payments you will allow yourself to pay off your full mortgage balance in full much quicker. If you could afford to make the extra payments each month, it would be a huge advantage for you and your family, because then you would have one less bill to worry about. You just have to sit down and figure out your existing bills. If you can afford it, you can weigh out the pros and cons of accelerating your mortgage payments.
Every extra dollar goes towards the principal balance
By adding an extra mortgage payment each year or even adding a little more money each month, even if it’s just a few dollars, you will benefit. Each extra dollar you pay towards your mortgage payment comes off the principal balance. As you know, the interest can accumulate quickly, so if you could put a few extra dollars towards the loan each month, you will be able to pay off the mortgage sooner than expected.
Over time, some places will even lower the interest rate if they are seeing how fast you’re paying it off. Some lenders like to reward customers when they make each payment on time or before the due date, so it’s not uncommon for them to reduce the interest. Not every lender does this, so it’s worth checking out to see if yours does.
Paying off balance sooner
If you like the thought of not having an extra bill, you may want to consider the option of paying it off sooner. Not everyone can take advantage of this option, and it may not be for each person, but every dollar counts.
However, when someone pays more on what they owe each month, the interest won’t be as much as it typically would be. The balance would drop a lot faster, and soon enough it would be paid off. It’s nice to have one extra bill, so having the freedom of paying extra if you want on a payment is beneficial in the long run.
If you’re thinking about accelerating your mortgage payments, you should first weight out the pros and cons. If you think you would be able to afford to add money each month or even an extra payment each year, it will benefit tremendously. Even if you were only able to accelerate your mortgage payments a few times of the year, you would soon be on your way to have the freedom of having one less monthly payment.