How to Payoff That Mortgage Quicker!
Accelerated Mortgage Payments
Over the last few years I have been thinking about how to pay off my mortgage faster. Since I have owned my house for about 8 years I knew that a good portion of my interest was already paid so the real goal would be paying it off sooner rather than saving money. One other reason I am doing this is that given the low interest rate I carry on the house I don’t get much in terms of a tax right off. I reached out to my mortgage provider Wells Fargo and asked them about making weekly payments. They said that it would be fine for me to make weekly payments but that they would not be able to take the money in on a weekly basis. Every month they would hold the weekly dollars until I hit $3000 and then they would credit the payment on my account. Everything above this amount would go directly principal and would be considered early payments. They had a plan that would cost me some additional money for them to take weekly payments in real time. I completely understand that this option would reduce the cost of my loan significantly but given the age of the loan it just did not make sense. I opted to just send the weekly $1000 because at some point it would just add up in my favor over time.
My mortgage is about $3,000 a month so I figured that if I paid $1000 a week I would really accelerate my timeline. I felt that it was simple math at $3000 a month I am putting $36,000 per year and by paying $1000 a month I would be paying about $52,000 a year.
I have been doing this for a little under two years now and I must say that it was worth it. By making $1000 a week payments, I don’t really feel the pinch of making a large payment once a month. I also took a look at my most recent bill and even though it’s June it says that my next payment is due in December so I am already about 6 months ahead. I decided to call Wells Fargo to have them calculate my payments schedule based on my current payment frequency and they stated that if I continued to make weekly payments at the current pace I would be completed with my mortgage 11 years earlier than expected. I had a thirty-year mortgage and being able to pay it off in 19 years would be amazing. I am also considering taking my tax return each year and
My home mortgage is my biggest bill and being able to complete paying it earlier is what is best for me. Another highly recommended way of doing this is making your monthly payments as expected, saving money in an account and making one large payment at end of the year.
What other strategies have you used to reduce your costs?
