Buying your dream house isn't easy. There are several hurdles to tackle, like taking mortgages, making down payments, handing the paperwork, paying insurance, and whatnot. It takes an entire journey to transition from a homebuyer to a debt-free homeowner, and unless you manage your finances well, it can be a rather long one.
Unsplash | Paying off mortgage faster needs effort
So how do you ensure you don't get stuck in mortgage cycles that extend over several years?
Well, for starters, you can follow these tips by renowned real estate experts.
Tip 1: Use your additional income
Experts like Juan Kasuga, managing partner of Creditaria, assert that you can utilize any additional income that you earn for paying your mortgage faster.
Now, what is additional income, you ask? Well, it's nothing, but the amount you earn unexpectedly or that's above and beyond your regular source of income or your salary. A company bonus, for instance! If you benefit from a handsome bonus, dedicate a significant portion of it towards your mortgage payment. That will work to reduce the overall term of your mortgage and help you clear it off faster. But you might have to consult your bank before making such a payment.
Read - Why are additional incomes important
Unsplash | You should try devoting your additional income towards payments and also try advances
Tip 2: Follow discipline
Much like the other aspects of life, you can quickly become a debt-free homeowner by the following discipline.
According to Kasuga, you should consult your bank if you can exceed the pre-decided monthly installment amount if your budget allows it. For instance, find out if you can pay 20 percent more on your monthly contribution. So say your regular monthly payment is $100, find out if it's okay for you to pay $120 whenever possible.
Tip 3: Consult professionals
Another viable option would be to approach companies that offer advice and working strategies that can help you improve your mortgage terms. It is advisable to do this only if you stay regular with your payments and don't try to re-extend the payment period.
Now, a quick look at the benefits of faster mortgage repayment
Real estate analyst Leonardo González believes that one of the main advantages of paying your mortgage faster is that in addition to owning your home faster, you will also be able to achieve better personal finance. Moreover, if down the line you wish to buy a second property, you can avail a new loan with even better terms.
Investopedia | A quickly paid off mortgage not only results in better personal finance management but also helps to get better term loans in the future
Read - Key benefits of paying mortgages early
Final Thoughts
According to experts, you should keep in mind the term contingencies and let things roll on their own. They say that you can achieve the maximum reduction in mortgage terms if you start making advance payments right from the beginning of the loan. But, of course, everything depends on your financial stability and a regular inflow of income.