Why Alanis Morissette and island paradises might convince you to bump up your mortgage payments.
1) Pay Less PMI
Most lenders require you to pay private mortgage insurance premiums as long as your mortgage balance is 80% or more of your home’s purchase price. If you pay down your mortgage faster, your balance will dip below 80% more quickly, and you can pocket the cash you’d otherwise have spent on PMI premiums during the normal time period.
Additionally, if your home’s property value is significantly higher when your mortgage balance hits 80% versus when you first bought the property, your lender may require a new appraisal and move your PMI cancellation date out further into the future. If you can get rid of PMI sooner, you may be able to avoid significant market fluctuations and their potential effect on your PMI payments, saving even more money.
Are you in a position to pay off your mortgage early? Here are 7 reasons why it may be a good idea.
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