I was notified by one of my long time clients that he was sending his last payment that day and paid off his mortgage. He had a great rate, under 3% to help him pay it off quicker, but the question is, how did he get such a great rate?
I would say 80% of it was being savvy, the other 20% was having a scenario that allowed for the lowest rates, like high credit score, 40% equity, single family home and shorter term than the standard 30.
How was he savvy? If he could get a lower rate for free, he took it, and instead of just paying the minimum payment at the new rate, he paid the same higher payment that he used to pay. Basically taking the savings and using it to pay off the loan faster. He accelerated his payments with as much as he could monthly.
Now, he says, instead of making payments to the lender, he makes payments to himself and it's just as easy as it sounds.
How was he savvy? If he could get a lower rate for free, he took it, and instead of just paying the minimum payment at the new rate, he paid the same higher payment that he used to pay. Basically taking the savings and using it to pay off the loan faster. He accelerated his payments with as much as he could monthly.
Now, he says, instead of making payments to the lender, he makes payments to himself and it's just as easy as it sounds.
