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Pay off your mortgage faster

Home BlogPay off your mortgage faster

Key takeaways:

  • By paying off your mortgage sooner, you can save the interest you would have been charged.  
  • Making small changes can make a big difference.  
  • Refinancing into a shorter-term loan helps you pay less interest.

According to Zillow, nearly 29 percent of Americans own their home outright -- a lofty goal that many younger homeowners strive to achieve.

You can join the ranks of the debt-free homeowners by strategically paying off your mortgage faster. Many of these tactics are small tweaks that won’t break your budget, but they could help shave off multiple years from your mortgage:

  1. Contribute to principal. If you have an odd amount to pay, round it up and apply the extra as “principal only.” Even just an extra $50 a month towards your principal could help you save money in interest payments later.
  2. Utilize your tax refund. Use your refund to make an extra payment towards principal on your mortgage to help make progress in paying off your home.
  3. Refinance into a shorter-term loan. If it’s possible in your financial situation, consider refinancing when interest rates are favorable. This will result in less interest in the long run. Before starting the process, you'll want to consider closing costs and have an idea of how long you plan to stay in your home.
  4. Pour extra cash into your mortgage. Did you receive a bonus or a raise? Put that money towards your mortgage as additional principal. Only consider this if you have paid off other debt and have an adequate emergency fund.
  5. Make extra money on your home. If you’re going on a vacation, consider listing your home on Airbnb. You can make money instead of letting your home sit empty, and then you can use that money towards a principal payment on your mortgage.
  6. Use your rewards. If you have a credit card that gives you cash back instead of rewards or points, you can use that extra cash towards an additional principal payment on your mortgage. 

By employing a few strategies, you can pay off your mortgage sooner rather than later. If you have questions about refinancing or paying off your mortgage sooner, visit your local MidWestOne branch.

MidWestOne Bank does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

MidWestOne is pledged to the letter and the spirit of the United States policy for the achievement of equal housing opportunity throughout the nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin.