As we take in a new year, we think about ways to improve in 2022. Here are some simple New Year’s resolution tips for a homeowner. Whether your goal is to lower interest costs or pay off your mortgage sooner, any bit will help you financially.
It is important to pay extra on your mortgage, but not as important as paying off higher interest debts. If you have credit card debt to pay off from the holiday season, pay it down first. Once it is gone, you will have more cash flow to work with and add towards other financial goals.
Accessing your home equity is a great way to pay off high-interest debt and roll it into one manageable mortgage payment. If you have more than twenty percent equity in your home, you may be able to refinance it at today’s low mortgage rates. This will save you from paying higher interest rates on credit cards or lines of credit.
Once you pay off the higher interest debts, you can start thinking about ways to pay down your mortgage faster. The simplest way is to make accelerated mortgage payments. A change from monthly payments to accelerated bi-weekly payments will cost you the equivalent of one extra monthly payment per year. This will reduce the amortization of your mortgage by approximately three years over a twenty-five year period.
Slightly increasing your mortgage payment is a great way to pay down the principal on the mortgage. Every extra dollar goes straight to the principal, in return, building equity in your home.
Contact me for information or advice on setting a mortgage resolution this year. I offer a no-cost, no-obligation mortgage review. Whether you set a new goal or choose to accomplish an old one, I’m here to help you along the way.