Pay Off Faster
There are different ways to refinance your home, depending on your objectives. If you want to pay off your mortgage faster than you had planned, you need to reduce the term of the loan. You could also lower your interest rate by refinancing. Not only will you pay off your loan faster, but you'll save money, too!
Benefits of Paying Off Your Home Loan Faster
There are many reasons why home buyers like you choose to pay off their home loan. Either you plan for a home loan refinance to save money or you want to use the money going toward monthly mortgage payments for other things. For example:
- Perhaps you want to retire sooner than you planned, and you want to pay off your mortgage faster so you'll have more cash to spend when you retire. For example, paying off your home loan sooner would allow you the flexibility of living the lifestyle that you want or spending your retirement years traveling.
- You may have children who live out of state, but when you start having grandchildren, you decide you want to move closer to spend time with them. Paying off your mortgage faster will give you more profit from the sale. You'll have more money to purchase another home closer to your children.
- As your parents get older, you may want to move closer to them if they need help. You may want to pay off the mortgage before you make that move.
- When your children enter college, you may want more cash to cover college tuition fees and other expenses.
How to Pay Off Your Mortgage Loan Faster
The best way to refinance your mortgage loan to save money and meet this goal is to reduce the term of your loan. You can also look into reducing your interest rate.
30- to 15-Year Home Loan Refinance
If you have a 30-year home loan, you can refinance it as a 15-year loan. Your monthly payment will increase, but you'll pay off the loan much faster. In addition, a 15-year loan typically carries a lower interest rate than a 30-year mortgage. You'll save money by paying less interest.
Reduce Your Mortgage Loan Interest Rate
If you purchased your home when interest rates were higher, you may be able to refinance at a lower interest rate. You would save money over the term of the loan. And, try to keep your monthly payment at the same amount. This will let you pay off the loan faster. It would work even better if you can afford to increase your monthly payment.
Would you like to know how much you could save? Use our refinance calculators to find out! If you have questions about refinancing your loan to pay it off faster, feel free to contact us.