What are some tips for paying off a home loan?


Quick Answer

One basic way to pay off a home mortgage is to make the largest-possible payment every month instead of just paying the minimum amount due, as reported by Bankrate. Even the occasional extra payment can be helpful in reducing the principal amount of the loan, meaning that less and less interest is charged. Focusing on paying more than the amount due allows borrowers to overcome the extra expense imposed by interest.

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Full Answer

Refinancing is another way of making it easier to quickly pay off a mortgage. Those who got their mortgage at a period of relatively high interest rates may be able to make a bigger dent in their principal by refinancing to a loan with more favorable interest terms.

Individuals who are set on paying off their mortgage quickly should actually select a home that is within their price range, notes Clark Howard. Banks often allow people to sign up for mortgages that are more than they can actually afford, so it makes sense to set one's budget beneath the amount they can actually borrow. However, this isn't always an option, especially for those who already own a home. People in this situation can reduce spending and maximize their income in order to make larger, more frequent payments on their home loan.

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