Owning your home outright is a dream for many homeowners. Paying off your mortgage early not only gives you peace of mind but also saves you a significant amount in interest payments over the life of the loan. If you’re a homeowner in the Coulee Region or the surrounding areas, Firefighters Credit Union is here to help you make that dream a reality. In this guide, we’ll share some practical strategies for paying off your mortgage faster in 2024.
1. Make Extra Payments When Possible
One of the simplest ways to pay off your mortgage early is by making extra payments. Even a small additional payment each month can significantly reduce the length of your loan. For example, by making an additional principal payment each month, you can shave years off your mortgage and save thousands of dollars in interest.
If you live in the Coulee Region and have some seasonal income, such as from farming or working in tourism, consider directing a portion of those funds toward your mortgage. Extra payments don’t have to be large; consistency is key. Every little bit helps reduce the total amount of interest you pay.
2. Refinance to a Shorter Term
If you’re currently locked into a 30-year mortgage, refinancing to a shorter term could be a great way to pay off your mortgage early. A 15-year mortgage comes with higher monthly payments but also lower interest rates, meaning you’ll pay off your loan faster and pay significantly less in interest overall.
Firefighters Credit Union offers competitive refinancing options for homeowners in the Coulee Region. By switching to a 15- or 20-year term, you could own your home free and clear much sooner than expected. Refinancing also allows you to lock in a lower rate if rates have dropped since you initially took out your mortgage, making this an even more attractive option.
3. Consider Bi-Weekly Payments
Instead of making one monthly payment, consider splitting it into two bi-weekly payments. This method results in an extra payment each year because there are 52 weeks in a year, so 26 bi-weekly payments amount to 13 full monthly payments. That extra payment goes directly toward reducing your principal, helping you pay off your mortgage faster.
Many homeowners in Wisconsin appreciate this method because it feels more manageable. If you’re paid bi-weekly, aligning your mortgage payments with your paycheck can make budgeting easier. Firefighters Credit Union can help you set up a bi-weekly payment plan that works for you.
4. Apply Windfalls to Your Mortgage
Do you receive a tax refund each year, a work bonus, or perhaps an inheritance? Instead of spending it, consider putting those windfalls toward your mortgage. These lump-sum payments can make a huge dent in your principal balance, helping you pay off your mortgage faster.
Residents of the Coulee Region know that Wisconsin weather can be unpredictable, and saving for home maintenance is essential. However, if you have an emergency fund in place and receive a financial windfall, consider directing it toward your mortgage.
Pro Tip: Some homeowners also use their savings from refinancing or switching to a lower interest rate to make an extra payment toward their mortgage.
5. Round Up Your Payments
Rounding up your mortgage payment to the nearest hundred dollars can be an easy way to pay off your mortgage faster without feeling a significant financial strain. For example, if your mortgage payment is $980, consider rounding up to $1,000. Those extra $20 each month add up over time, reducing your principal and shortening your loan term.
Many people in the Coulee Region love the simplicity of this method—it’s a small, manageable change that doesn’t require a lot of planning but can have a big impact over time.
6. Use Your Mortgage Prepayment Privilege
Some mortgage lenders allow borrowers to make extra payments up to a certain percentage of the mortgage balance each year without penalty. This is called a prepayment privilege. If you have this option, take full advantage of it. It can help you make significant progress toward paying off your mortgage early.
Firefighters Credit Union offers flexible mortgage options to homeowners in the Coulee Region, and our mortgage experts can guide you through making prepayments on your loan.
7. Downsize to a More Affordable Home
Downsizing is a more drastic option, but if you’re looking to pay off your mortgage as quickly as possible, selling your current home and purchasing a more affordable one can allow you to put a larger down payment on your new home, reducing your mortgage balance and shortening the repayment period.
This option is particularly appealing to empty nesters or retirees in Wisconsin who no longer need as much space but want to be mortgage-free sooner. Firefighters Credit Union can help you navigate this transition, ensuring that your new mortgage is set up for success.
Paying off your mortgage early is an achievable goal, especially with the right strategies and guidance. Whether you’re making extra payments, refinancing, or applying windfalls, every step brings you closer to being mortgage-free. At Firefighters Credit Union, we’re committed to helping homeowners in the Coulee Region and surrounding areas achieve financial freedom. If you’re ready to take control of your mortgage and explore early payoff options, our team is here to help.
Reach out to Firefighters Credit Union today to discuss your mortgage and savings goals. Together, we’ll make your dream of owning your home outright a reality.
