It's easy to pay off a 15 year mortgage in 7 years, you just need to pay off your mortgage early, it can help you maintain financial stability, save money and earn less interest.
Here are some ways to pay off a 15 year mortgage in 7 years
1. Restart Mortgage Financing
If interest rates decline, you may be able to reduce the amount of interest you pay by refinancing your mortgage. In addition, you can also choose to significantly reduce the term of your loan.
2. Reduce Mortgage Payment Term
Remember to tell your lender that your extra payments should be applied to principal, not interest. Otherwise, your lender may apply payments for future scheduled monthly payments, which won't save you any money.
Also, try to prepay at the beginning of the loan when the interest is highest. You may not realize it, but most of your monthly payments for the first few years go towards interest, not principal. And interest is compounded, meaning that the interest every month is determined from the principal amount of the debt plus interest.
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3. Immediately Make One Additional Mortgage Payment Per Year
Making an extra mortgage payment each year can significantly reduce the term of your loan.
The most budget-friendly way to do this is to pay an additional 1/12th per month. For example, by paying $975 each month for a $900 mortgage payment, you will pay the equivalent of the additional payment at the end of the year.
4. Collect Your Mortgage Payments
Another way you can help reduce the term of your mortgage significantly is by collecting. When budgeting your mortgage payments, round to the next highest $100 amount. Pay $800 instead of $743. Or $900 instead of $860.
5. Try One Month Dollar Plan
A one-month dollar strategy should be financially viable if your income increases slightly but is consistent over time.
Every month, increase your payout by $1. Just pay $900 in the first month, $901 in the second month, and so on. For a 30-year, $900-a-month mortgage with a fixed interest rate of 6% for a $150,000 loan, you can reduce the term of your mortgage to eight years.
6. Using Unexpected Income
Unexpected income This includes vacation bonuses, tax refunds, and credit card gifts. Using this money will not cut your regular monthly budget.
That's how to pay off a 15-year mortgage in 7 years, hopefully the information above can help you all.