How to Pay Off Your Mortgage in 5 Years Or Less

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In 2019, the average price of a house is $200,000.

Unless a windfall comes your way or you were born with a golden spoon, it’s likely you won’t be able to raise this kind of money in one go. Even if you were to save, it would take you several years to afford a house in cash. It’s for this reason the vast majority of homebuyers take out mortgages.

However, mortgages are long-term loans, and with time comes uncertainty. Working towards settling the debt quickly is a smart move.

Here’s how to pay off a mortgage in 5 years or less.

Purchase a Home That’s in Your Financial Range

A common mistake homebuyers make is purchasing properties that are way above their financial means, and it’s to see why. Lenders are out to make a tidy profit, so as long as your credit is perfect and you’ve got a good income, they have no problem approving you for higher home loan amounts.

If you make this mistake, you could be stuck in debt for several years.

When your plan is to pay off a mortgage early, go for an affordable home that suits your living needs. If a $200K home suits you, there’s no need snapping up a $500K home. Obviously, it’s far easier to pay off $200K within a shorter time.

Shop Around for the Best Mortgage Lender

Different mortgage lenders offer varying interest rates. Other terms and conditions also vary.

If you fall for the first lender you find, you might end up with a pricier mortgage. Avoid this mistake by shopping around before settling on a lender. It’s advisable to use a mortgage broker because they have information on the best offers in the market.

Securing a mortgage with lower interest rates and other favorable terms makes a big difference when your aim is to pay it off early.

Put Your Mind to It

Face it: Your home is a big-ticket item. The reason your lender gave you 15 or 30 years to clear the loan is they know it’s hardly possible to raise the money (plus interest) in a couple of years.

As such, you’ve to tell your mind that you’re taking a step few have taken and succeeded. You’ve to be ready to make sacrifices that could affect your current lifestyle.

A debt consolidation mortgage is a financial tool that allows homeowners to consolidate all their debts into one mortgage loan. This type of mortgage is specifically designed for individuals who have accumulated various debts such as credit card debt, personal loans, and other outstanding balances.

The concept behind a debt consolidation mortgage is to simplify and streamline debt repayment. Instead of making multiple payments to different lenders, borrowers can combine all their debts into a single loan, which is secured against their property. This can help borrowers manage their finances more efficiently and potentially save money on interest payments.

Without the right mindset, you can only achieve so much.

Increase Your Income

When it comes down to it, increasing the size and frequency of your payments is the only way to pay off your mortgage fast.

Start by doing the math. How much money would you need to pay every month such that you’re able to settle the loan in 5 years or less? Use this loan early repayment calculator.

Next, develop strategies to increase your income. You could take up another job, for example. Embrace a frugal lifestyle, too. This means cutting back on your excesses.

With a larger disposable income, you’ll be able to double or triple the size of your mortgage payments.

That’s How to Pay Off a Mortgage in 5 Years or Less

Looking at the sheer size of your mortgage, you can easily conclude that settling it early is an impossible feat. But with this guide on how to pay off a mortgage in 5 years or less, you just might be able to pull it off.