A mortgage gives your family a fast and convenient way to buy a home without having to save up your money for decades to make the purchase. You may have used that mortgage to pay for your family’s second home in the woods. Families that own a log cabin often have a desire to enjoy the simpler things in life. Your primary goal may be to spend more time enjoying the cabin and less time working to pay the mortgage. If you are looking for a way to pay the mortgage off more quickly, consider putting these tips to work for you soon.
Use All Refunds and Bonuses for Debt Reduction
Many families that own a log cabin receive numerous surpluses of cash throughout the year. For example, you may receive a tax refund, a bonus from work, a dividend check and more. Rather than spend this money, use it to make extra principal payments on the mortgage. When you make this extra effort on a regular basis, you may be able to pay the mortgage off several years faster than you otherwise would be able to.
Make Extra Payments
It may not seem like making one or two extra mortgage payments per year on your log cabin would have a large impact on mortgage debt reduction. However, these types of loans are amortized. This means that reducing the amount of principal owed on the mortgage now will reduce interest charges on each payment going forward. Essentially, each future mortgage payment is more heavily allocated toward principal than it otherwise would have been.
Refinance the Loan Strategically
Another step that you can take is to refinance your mortgage. This should be done with care after thorough analysis. The interest charges and loan fees on some refinance loans could make this option more expensive in some cases. However, if you are able to establish the loan on a shorter term with a lower interest rate, this could potentially be a great option to pursue.
Families that own a log cabin understandably want to make full use out of their vacation home, and the parents may even have plans to retire in this cabin within a few years. Paying off the mortgage is essential if you want to thoroughly enjoy all that this property offers. Implement these tips now, and you may be able to pay your mortgage off several years or more, faster than you otherwise would be able to.