I want to know if there is a way to pay off your mortgage faster. I live in Canada.
Little Princess
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I don't live in Canada, but in the U.S.A. I suggest that you contact your bank who holds your mortgage and ask if there is some way that you can pay off your mortgage sooner.
They might be able to juggle your payments so you are paying more money on the principle.
Instead of paying your mortgage once a month, have your bank split that payment in half, and therefore they are getting two payments per month (totaling your one lump sum). Just by doing this, we are shaving off 6 years off the mortgage. They can even have the payments come directly out of your account every 2 weeks.
I suggest you talk with your banker or whom every you owe to see if you can pay it off as soon as possible.Or read your contract. It might have this info in it. Good luck.
If you contact your banker I can almost guarantee they're going to try to talk you in to a 'program' and they will charge you for it!
Just simply write two checks a month. One for the required payment stating the payment due date in the memo and the other check (for as much as you can pay extra) with 'Towards Principle' in the memo and send in the same envelope.
At the beginning of each year all mortgage companies are required to send you a printout of the previous years payments and balances so double check that your 'principle' payments were actually credited as 'principle'! You can only be charged actual interest on the actual principle due at any given time so you'll be whittling away those charges more quickly than you think if you'll pay at least half, if not a full equal amount your scheduled mortgage payments!
Look at your amortization schedule. If you didn't get one at closing, ask your bank for one, or make one yourself, with the current mortgage balance, interest rate, etc. Lots of programs floating around that you can use. Then, each month, pay your regular principal and interest (escrow?) payment, plus the principal payment(s) on the next few payments -- as many as you can afford. The next month pay the P&I on the next payment (Skip the ones you paid principal only on the month before) plus some more principal payments.
Whatever method you choose for early paying of principal, you should not have to pay extra fees to anyone. Ensure by specifically checking (getting a statement for example) that the payments ARE reducing your principal rather than being warehoused or being placed into an escrow account after you've been paying the extra for a few months.
Whatever method you choose for early paying of principal, you should not have to pay extra fees to anyone. Ensure by specifically checking (getting a statement for example) that the payments ARE reducing your principal rather than being warehoused or being placed into an escrow account after you've been paying the extra for a few months.
When we bought our house, we had it in mind to have it paid off in 5 years. No one thought we could do it. Ha - we paid it off in four.
First when we found a bank to do our mortgage, we made sure we could pay back extra each pay day without getting penialized. Second, we put all the funds we could find on the mortgage. We used the Credit Union. (Ottawa, Ontario) We cut down on extras in our shopping, dined out only occasionally, and put all we could down.
The way we looked at the situation, we are only young once, and we could work hard and save hard for our goals. We are now mortgage free and are now enjoying spending on us. Yes, spending on the fun stuff.
Good luck to you.
Karyn
I believe Deeli said it best. First, check to make sure there are no fees or penalties for making extra payments to principal. Then write a separate check each month and mark it on your check "for principal only". Some months it might only be $25 but other months might be for a lot more. This is why I did not make it automatic. You never know what each month brings. I paid off a 30 year mortgage in 7 and feel absolutely free!!
Read your loan info and that should tell you if you have early pay off penalties. We pay extra principal every month.
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