There are few things more frustrating than looking at your remaining mortgage payments and realizing how long you have until you truly own the home in which you currently reside. While 30-year loans tend to be the standard for a variety of reasons, at Tim DeCapua Real Estate Services we want to make you aware that you have some options at your disposal to get the most out of your mortgage while working to pay down the entirety of the loan before the end of the 30-year term.
Reduce the Term of a 30-Year Loan Through Refinancing
Refinancing your loan can have a number of benefits, particularly when you reduce the length of the payment schedule to 15 or 20 years. In reducing the term of the mortgage, you bring down the cost of the interest that you pay over the life of the loan, as not only will less interest accumulate over time, but shorter-term loans tend to have lower interest rates to begin with. Of course, shortening the length of the loan through refinancing will result in a higher monthly mortgage payment, but the savings that are accumulated over time are significant and will help in paying off your mortgage at a more rapid rate.
Maintain Flexibility By Getting Ahead on Payments
Refinancing is not for everyone, and increasing the cost of the monthly mortgage may be somewhat burdensome to homeowners. If you wish to get ahead on your mortgage, you can still do so by paying as though you have shortened the term of the mortgage without actually doing so. You can therefore retain the flexibility of the 30-year term in case an emergency arises in which you cannot make the larger payment. The same is true if you are already relatively close to the end of the 30-year term, as there are some costs in refinancing that must be calculated in advance before pursuing this course of action.
