Do you feel the pinch every time you pay your bills?
Smart budgeting can ease the financial strain to make sure you can not only pay your mortgage on time but also get ahead and pay it off earlier.
Staying on track with payments helps you avoid late fees. Paying the balance down faster than planned can save you even more money by reducing the amount of interest you pay over the life of the mortgage.
Use these tips to pay extra money toward your mortgage
Have an Emergency Fund
If you don’t already have some money set aside for financial emergencies, focus on doing that first. Having that little buffer can keep your budget on track.
If your budget is already tight, you don’t have room for a big unexpected bill, such as a car repair or a large medical bill. Paying those bills can cause you to come up short for your mortgage and other bills.
Tuck away a little of your paycheck each payday to build your emergency fund. This helps keep your regular budget intact.
Cut Your Expenses
Looking at your budget, highlight the biggest expenses. Can you reduce or eliminate them?
Contact service providers for your internet and other extras to see if they’ll give you a special rate. Cancel memberships or subscriptions you never use or won’t miss.
For things such as groceries and clothing, paying with cash helps limit your spending. Withdraw the amount you set for those things in your budget. When the cash is gone, you’re done spending for the month.
Make Bi-Monthly Payments
Paying your mortgage bi-monthly means you pay half of the amount two times each month. This option can reduce how much interest you pay.
Not all lenders allow you to pay this way, and some might charge fees for paying bi-monthly.
You can also pay bi-weekly. With this method, you pay half of your monthly mortgage amount every two weeks. If your mortgage is $1,500 per month, you would pay $750 every two weeks.
This option works out to be an extra monthly payment. You’ll pay 26 bi-weekly payments of half your monthly mortgage amount instead of only 24. Thos two extra bi-weekly payments add up to one monthly payment, $1,500 in the previous example.
Put Extra Money Toward Your Mortgage
Another way to pay off your mortgage faster is to put any extra, unexpected money toward the balance. Those extra dollars aren’t figured into your regular budget anyway. Putting them directly toward your mortgage shouldn’t affect your normal budget.
Some examples of extra money you might receive include tax refunds, bonuses at work, or rebates on purchases.
Make Extra Money
If you still want to pay your mortgage faster, focus on adding income to your budget. A traditional way to do this is with an additional part-time job or side gig.
Instead of adding that income into your normal budget, allocate all of it to go toward your mortgage.
If you’re really struggling to keep up with your mortgage, you can sell your property quick for cash. This gets rid of your mortgage and lets you move on with less of a financial burden.
Practice Smart Budgeting
With smart budgeting, you can put more money toward your mortgage. That helps you stay current on your mortgage payment and pay off the mortgage faster.
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