Owning a home is a wonderful accomplishment, but it’s not without its detriments, especially when it comes to costs. One of the most intimidating things about homeownership is keeping up with the mortgage. Payments can either be made gradually or all at once if that’s an option and truly, that isn’t always the case for most people. So, how can paying down the mortgage be beneficial, and what are some clever and strategic ways to go about making these payments as efficient as possible?
One of the pros of paying off the mortgage is early is saving money on interest, but on the other hand, allowing payments to be stretched further means a better return on investment and credit building. Realistically, both of these ideas are pros depending on the situation, and either of them can go in tandem with a predetermined course of action. However, a swifter plan to consider would be higher monthly payments that will accumulate a decent rate of return over the course of years. Regular payments can lessen the amount of interest that will be owed in the long run. Remaining consistent on payments will help with reducing that. Mortgages can oftentimes be accompanied by other fees that add up rather quickly, like an insurance plan for the mortgage itself, which, in some cases, lenders will require homeowners to have if a 20% down payment isn’t made upon initial home purchase. What’s more, being a homeowner in a financial environment that has the potential to face both inflation or deflation at any given time should be another pro reason to consider consistent down payments. One of the most obvious pros in all this is the potential for financial freedom. Having a dwindling mortgage due to a set plan means more money available for everyday life and possibly even the beginning of a new savings account.
From smaller interest rates to building credit and saving more money, paying down the mortgage in as short of a timeline as possible has a significant amount of benefits. While these factors may seem minor, their overall impact and advantage far outweigh the excess fees and costs that are inevitably bound to surface as a homeowner!