Tips for Paying Off a Mortgage in Less Than Five Years

Wednesday, July 29, 2015, 6:00 AM | Leave Comment

The biggest monthly bill most people will have to make out each month is related to housing. Whether renting or buying, this expense will be several hundred to several thousand dollars each month. Imagine not having this bill, and the impact it would make on the average family’s budget.

Most people will take out a 30-year mortgage and plan to pay basically until they die, but this isn’t always necessary.

Here are some tips that could help get the mortgage paid off in fewer than five years. If you’ve already been paying for a while and have built up equity, it should be even easier.

Tips for Paying Off a Mortgage in Less Than Five Years

  • Refinance

    Those who took out a loan several years ago are probably locked in an interest rate that was much higher than it currently is, and if you took out a variable rate, you could see your current rate increase substantially.

    Which is why looking into refinancing could be a great way to save on interest payments and make it more likely that you could pay off a home in less than five years.

    According to Mann Mortgage, others who have built up a substantial amount of equity can take advantage of a VA Cash out refinance loan to help pay off other expenses as well.

  • Look into an Amortization Calculator

    There are a number of great amortization schedules available online. By putting in the amount that’s still left on a home loan and plugging in five years for the length of the loan, you should come pretty close to what would be necessary each month to pay off the loan in that amount of time.

    Having a plan is always important when trying to get ahead financially. Make it a big part of your payments while you can and watch the date to paying it off get closer.

  • Put Extra Funds toward the Loan

    Most people have a few bucks each month that could easily be cut from their lifestyles without really making much of a negative impact on their actual standard of living. Maybe it’s your coffee in the morning or your monthly night out.

    Sacrificing a little now can mean more savings in the future. These extra funds should be put toward the mortgage to get the debt paid in less than five years.

  • Downsize

    If you’ve got a large home that’s more than what you actually need, it should be possible to sell it and still get some equity out of the sale.

    Depending upon the amount of equity that’s been accumulated, there might be enough funds to buy a new home for cash.

    If not, the substantial down payment will help cut the amount needed to become mortgage free within five years.

  • Earn Extra Money

    For those who cannot pay off their mortgages using the tips above, making additional income might be the only way to make a five-year mortgage payoff possible.

    These funds can come from moonlighting, getting a raise, or working extra hours at a primary job.

    Find different ways to use your skill sets more creatively and earn yourself some extra cash.

While paying off a home in five years might seem like a daunting task, there are many people who have achieved the goal.

These five tips could help you on your way to joining their ranks, and greatly expanding your cash flow each month.

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