This is a guest post written by the writer of FindSecuredCards.com, a website that offers the best secured credit cards on the market.
Perhaps, the largest debt anyone can have is a home loan. Mortgage loans can be really big as they are designed to be paid gradually over a period of time.
Some of us however, want to get rid of our debts immediately. Well, if you’re one of those people who want to speed up the completion of payment for your loan, then why not try some of these strategies?
1. Review your current financial standing. The first thing you have to do is to take a look at your present financial position. You can check your savings balances, retirement accounts, investments, and total income. From there, you will be able to discern whether you have enough financial resources to pay your huge debt early. If you think you are financially capable of doing that, then you need to make some financial adjustments so that you can speed up payment of your mortgage.
2. Compute your debt to income ratio. Try to calculate what percentage of your income is being used to pay off debts. Just divide the sum of all your monthly payments including your mortgage by your total net monthly income then multiply by 100. Take note that most money lenders do not finance borrowers who have a debt to income ratio which is higher than 50%. This means that you can only opt to accelerate the payment of your mortgage if your debt to income ratio is more than 50%. Otherwise, you might not be able to meet your financial needs. So try to assess your finances first.
3. Cut down on unnecessary expenses. First, why not try to review your bank statement for the last three months then try to see which areas you are spending most of your money. Try to think which areas you need to save on such us cutting down your internet or cable TV connection, subscriptions on books and magazines, or other unnecessary expenses like going to the gym. You can also try to limit your budget for travel, entertainment and other expensive gadgets.
4. Pay your mortgage loan with large, lump-sum payments. If you really want to pay your mortgage early, why not sacrifice short-term savings goals? But just make sure you have enough emergency or contingency funds for the next six months. Another thing you can do is pay your mortgage loan using most of your freed up income. Just deduct all your monthly expenses from your total monthly net income.
5. Refinance your mortgage. Rates are especially low and you can save thousands of dollars on your home mortgage with an FHA streamline refinance. This will allow you to pay a lower interest rate and allow you to either pay off your loan more quickly or save money to be used on other things.
Come to think of it, paying your mortgage early is one of the best investments or moves you can ever make. So try to make it an option, and pay it down as soon as possible!