Our culture tends to tell us that you will always have a mortgage, but we all know that’s just not true. Or it doesn't have to be true! At Churchill, we do things a bit differently than other mortgage companies. We believe in a better version of the American dream—debt-free homeownership.
Our mission is to help you find the best path to owning your home free and clear, regardless of your starting point. If you’re buying a new home, we’ll help you find the right strategy to pay off that house quickly, so you can have more financial freedom. And if you’re refinancing your mortgage, we’ll help you analyze your situation and find the path that leads you where you want to go.
Here’s 7 tips to help you get started on paying off your home loan early:
Put as much cash down as possible. The more cash you put down at the beginning, the less money you need to finance. Sounds pretty simple, right? We do realize that not everyone is able to make a 20% down payment. It’s not worth depleting your savings and emergency funds for a down payment. So, depending on your situation you may choose to save a little longer, or put less down with the intention of making it up on the back end.
Buy a home you can really afford. Before you buy a home, estimate a monthly payment and loan amount based on your annual take home pay, interest rate, and down payment amount. If you’re ready to take the next step and find out your real number, we recommend becoming a Churchill Certified Home Buyer. As a Certified Home Buyer you're not wasting your time with useless pre-qualifications or unreliable pre-approvals. If you're serious about buying a home, getting certified is the way to go.
Make biweekly mortgage payments. You’ll pay half your mortgage payment every two weeks (so that’s 26 half payments, which equals 13 full monthly payments each year). Not all lenders permit this so make sure it’s allowed and that you specify the extra payments should go toward your principal. We recommend consulting with your lender (and a financial adviser, if you have one) so you can make sure you’re making the most of your savings.
Make an extra house payment each quarter. If you can’t make biweekly mortgage payments work, try to pay an extra house payment every 3 months. If you go this route, check to see if the lender allows this and then make sure you’re specifying that the extra payments should go toward your principal and not the bank.
Refinance your longer-term mortgage into a 10 or 15-year loan. Or if you already have a super low interest rate, just pay on your current 30-year mortgage like it’s a shorter-term loan. Any way you slice it, an increase in payments equals an early pay off.
Make small sacrifices. Start brown bagging it for lunch and cut out of those expensive coffee runs in the morning. Think about how much you could save and put toward your house payment each month if you reduced your weekly lunches or trips to the local coffee shop. Budgeting is your friend here!
Meet with your Churchill Home Loan Specialist annually. We call this our “Churchill Checkup.” This quick check in allows us to identify any potential changes in your loan term or interest rate that may speed up your pay-off timetable. Have a quick question? Don’t wait! Your Home Loan Specialist is available, free of charge, throughout the year to answer any questions you have.
Paying off your mortgage is a big deal, and in our opinion, a very important part of homeownership! That's why we believe teaching debt-free homeownership is critical to the home buying process. We know first hand that being a mortgage-free homeowner is both desirable and attainable!
For more information about how to pay off your mortgage, reach out to one of our Home Loan Specialists for a Churchill Checkup.