When you have a 30-year mortgage, it’s hard to even imagine life without a mortgage payment. Fortunately, one of the benefits of having an accelerated mortgage is that you can experience life without a mortgage payment much sooner than three decades from now. If you desire to become debt-free, an accelerated mortgage program is a good way to help you achieve your goal. The primary benefits of an accelerated mortgage are explored below in greater detail.
Pay Off Your Mortgage Faster
As mentioned, one of the primary benefits of an accelerated mortgage program is paying off your mortgage faster. In fact, you can knock off multiple years by periodically making additional half payments. The extra payments that you make go directly towards your principal. The specific amount of time it will take to pay off your mortgage will vary depending on your interest rate and the amount of the additional payments made. Carlile Realty & Lending can provide useful information about how an accelerated mortgage can work for you.
Pay Less Interest
Interest is essentially the cost of borrowing money from a bank. When you introduce a mortgage accelerator into the equation, you end up borrowing more money for a shorter period of time, which is why it costs less. There are some instances when a mortgage accelerator has reduced the mortgage by more than $100,000. The actual numbers will depend on your situation, but you can get an idea of how it will look for you by consulting with a mortgage broker Sacramento residents trust.
Build Equity Quicker
There are a lot of benefits to having equity in your home and an accelerated mortgage is often considered an ideal way to build equity faster than you would otherwise. It’s also advantageous because it doesn’t involve larger mortgage payments, but instead offers a way to make payments in a different way than usual. This is something that’s beneficial when purchasing Sacramento CA real estate. One of the reasons why establishing equity is important is because it’s a great way to build wealth in the United States. In fact, it’s how the middle class was first established. Home equity will continue to be a source of financial stability.
Establish Good Financial Habits
Taking advantage of an accelerated mortgage program is a great way to establish good financial habits and take control of your financial future. It’s a way to make sure your finances are well managed and structured, which will assist you in developing good financial habits for years to come. An accelerated mortgage will enable you to pay off your mortgage faster and make other investments down the road with the money that would have been used on mortgage payments.
Choose Your Loan Term
An accelerated mortgage program gives you a chance to choose the loan term that works best for you. Instead of only having the option of a monthly payment, you can choose a biweekly or bi-monthly payment schedule. You can also set up your account so that the payments are made automatically. An accelerated mortgage program can put you in the driver’s seat and help you achieve your long-term goals.
Do What Works Best For You
There is no one size fits all when it comes to mortgage lending. Only you know your financial status and goals. In addition to assessing your current financial situation to determine what will work best, you should also consider whether the money used for an accelerated payment could be used for another type of investment. While there are many instances when an accelerated mortgage makes sense, that’s not always the case. You’ll need to consider the amount of interest that will be saved through the program as you decide. If you have a lower than usual interest rate on your mortgage, there’s a chance that it won’t make sense to accelerate payments.
The ultimate goal is to have your money work for you through a sound investment. There are many different factors that must be considered, such as whether you intend to live in the house for the rest of your life. Sometimes the amount of debt a person has can add to the amount of stress they feel. If your mortgage causes you to stress, then it’s probably worth your while to investigate an accelerated mortgage program. If paying off your mortgage sooner than later will positively impact your overall wellness by eliminating stress, it’s probably a wise decision to make.