Paying Off Your Mortgage Earlier Than Scheduled - Part 1

Jan 5, 2023 at 7:00am
Paying Off Your Mortgage Earlier Than Scheduled - Part 1

In this blog we will explore the advantages of paying off your mortgage early or making a payment ahead of the monthly schedule. Yes, it may seem like an impossible commitment, with all the other competing financial commitments that homebuyers have. The bottom line is that it is possible. Like any other goal worth achieving, you need to be intentional, determined, and disciplined. It all ties back to being financially literate and being smart with how you spend your hard-earned dollars.

Why would one want to pay off their mortgage earlier?

The homeowner saves a lot of money which otherwise goes towards servicing interest on the principal debt, when settling the mortgage earlier than originally scheduled. Early settlement results in shaving off years of mortgage repayments.

Early settlement may require disposable income and discipline in budgeting

Not everyone has disposable income, however there are ways of structuring your finances in such a way that we realize some level of disposable income. Below are some of the ways:

  1. Cash from an annual salary increase – plan to add the percentage of your salary increase towards your regular monthly mortgage payments.

  2. Drawing up a strict budget and have the discipline to stick to it until the goal is achieved.

  3. Since interest rates are calculated daily, paying earlier in the month or before the scheduled date, means less interest accumulated, and cut years off your home loan, in the long run.

  4. Renting out your property or part thereof, means that you have other people paying your mortgage. However, your property needs to be in good condition and have adequate security to attract quality tenants that will not give you problems with rent payments.

For more information on the subject of home buying and home ownership visit the following links:

Look out for Part 2 of Paying Off Your Mortgage Earlier Than Scheduled

Compiled by Mpume Nyandu, HPP Cares' Director: Stakeholder Relations

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As a social enterprise, HPP CARES CDE has achieved significant and wide-ranging accomplishments in recent years. Working under the National Coalition for Equities' (NCFE) umbrella, our focus has been on advocating for a strong community voice among federal and state regulators and major private sector corporations. We've dedicated ourselves to addressing public policy issues, particularly those related to wealth and income inequality impacting affordable homeownership and small business growth.

Through collaborative efforts with NCFE, HPP CARES CDE has expanded outreach initiatives, leading to increased corporate social responsibility and consumer protection awareness. Our endeavors have enabled us to engage with a broader audience, forge partnerships with numerous companies, and engage with regulators, all with the goal of supporting deserving individuals in achieving sustainable homeownership, fostering successful small businesses, protecting consumers, and empowering California communities.

At HPP CARES CDE, we are committed to championing opportunities for people of color to become integral partners in our mission to reduce income and wealth inequality, thereby contributing to the creation of stronger futures for all minority groups.