You might be curious if fixed-term mortgages are worth your consideration. It is often a good idea to pay off your mortgage before it becomes due. You’ll enjoy a number of benefits if you consider paying off your mortgage earlier than you think.
Save thousands on interest payments
The single greatest benefit of paying off your mortgage early is the savings in interest. The more time you wait to pay off your mortgage the higher your interest rate.
If you take a 30-year fixed rate mortgage at a rate of 5.5 percent, you will pay the same amount in interest as principal over the life of the loan. However, if you pay off your $300,000.00 mortgage five years before the due date, you can save $60,000 in interest.
This will greatly improve your credit score
Mortgages are a large debt. The longer you wait to pay it off, the more credit it will cause.
Your credit score will improve significantly if you pay off your mortgage early. This will allow you to get loans to purchase an investment property or start making income from a second house. You’ll also have significant new cash coming in once your first mortgage is paid off.
Your Cash Flow Will Be Freed
After you have paid off your mortgage you will be able to free up a lot of income each month. This money can be used to invest in mutual funds, savings accounts, travel around the globe, or a college fund. You’ll have more money each month to save, invest and spend. This will help you reach your financial goals quicker.
Although it may seem daunting to pay off your mortgage sooner than you expected, it is possible with discipline and a solid plan. The best part is that you can pay your mortgage off before it matures. This has many other benefits. You’ll enjoy a wide range of lifestyle benefits and financial freedom.
Learn more about the mortgage process and discover new ways to pay off your mortgage faster. To schedule a consultation, contact your local Beverly Hills mortgage professional.