NEW YORK (2/26/15)--Increasing the frequency of mortgage payments is one way homeowners can trim some time off the length of their mortgages, according to a CUNA personal finance expert.
By bumping mortgage outlays to half-payments every two weeks from once monthly, borrowers can shave up to 2 1/2 years off a 30-year mortgage, CUNA Director of Consumer Periodicals Susan Tiffany told MainStreet.com (Feb. 25).
Mortgages typically are the largest and longest debts a borrower carries. However, Tiffany noted that paying off high-interest debt such as credit cards, investing in retirement and building up an emergency fund should be priorities.
"If you're carrying credit card debt, I'll bet you a cookie it's at a heck of a lot higher interest rate than your mortgage is," Tiffany told MainStreet. "If you can't pay your credit card bill off every month, you shouldn't be putting extra money toward mortgage payments--you should be putting those extra mortgage payments toward your credit card bills."
Refinancing to a 20- or 15-year mortgage is another option for winnowing down the mortgage term. The longer term of 30 years does provide flexibility, though, for those who have a fluctuating income, Tiffany said. Extra cash can go to the mortgage when possible, but borrowers aren't committed to higher payments.