How to Pay Off Your Alaskan Mortgage Early
Becoming a homeowner in the Fairbanks, Anchorage, Eagle River, Palmer, Wasilla, and North Pole areas is exciting, but the thought of paying on your mortgage for the next 30 years may be anything but that. Not to mention, there are many other expenses associated with your home purchase— the inspection, the down payment, the closing costs.
Alaskan homeowners can easily feel overwhelmed, but as your local real estate experts, Madden Real Estate is happy to provide a few ways to keep those expenses down and pay off your mortgage early!
Make an extra payment
One of the simplest ways to start paying down your mortgage is to make one extra payment each month. Most lenders today do not have pre-payment penalties and just by making one full additional payment during the year could take about four years off of your loan.
Add onto your payment
If you cannot swing making a complete extra payment during the year, you can begin to add extra to your mortgage payment each month. Even adding as little as $100 onto your payment, applied to your principal, over the life of the loan, you could take five years off and pay tens of thousands less in interest!
Refinance into a shorter term
Refinancing your mortgage from a standard 30-year loan to a 15 or even 10-year term could save you thousands in interest, especially if you locked in a rate when they were much higher. Just keep in mind that these shorter term loans—although packaged with a lower interest rate—do typically require Alaskan homeowners to have at least 20 percent in equity in order to avoid private mortgage insurance.
It's also important to note that you will need to pay one-time closing costs again to refinance, and what's more, your payment each month will likely be much higher than you're used to. Why? Because you're spreading out your loan amount over a significantly smaller amount of time. If you don't plan to stay in your home long-term, a refinance may not always be the best option for you, so it's key to talk to your lender in Fairbanks, Anchorage, Eagle River, Palmer, Wasilla, or North Pole.
Feel free to contact Madden Real Estate with any questions you have about buying a home in Alaska this year or for a list of available homes in the area.
We even have a Love it Or Leave It Guarantee— If you buy a home through us, and you are not completely happy with with your new home, then we will list it for free while you search for a home that you love.
The Madden Real Estate Team
Madden Real Estate with Keller Williams Realty Alaska Group
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