A man and his child relax in their home, which he paid off early.

Strategies to Pay Off Your Mortgage Early

Updated February 3, 2019 . AmFam Team

If you’re in a good financial position, paying off your mortgage early is a great idea. But it’s not always as easy as making an extra payment in the middle of the month — check out our tips for making sure paying off your mortgage early is the right thing to do.

If you’re like most homeowners, you had to take out a mortgage in order to purchase your home. With that mortgage, you’ll be paying the agreed upon price of your home plus interest over your loan’s term. And while mortgages are generally considered “good debt” — that is, relatively low-interest (most of the time) — no one really likes to pay interest.

So if you’re in a financial position to do so and the conditions of your mortgage are right, you’d be smart to consider paying it off early. Here are some strategies on how you can save money and get that debt off your back,

Can (or Should) I Pay Off My Mortgage Early?

While getting rid of your debt as soon as possible always seems like a great idea, there are some scenarios in which it can put you in a bad spot. Consider these topics and find out if mortgage pre-payment is right for you:

Mortgage pre-payment penalties. Some mortgages have pre-payment penalties built in — some will include penalties for refinancing your loan (in which you pay off your current mortgage by replacing it with another loan), some will penalize you for selling your home and some include both. There may be other conditions, too.

Most penalties will only be triggered if you pay over a certain percentage of your balance in a particular month. Talk to your lender and get all the details about your home loan and any restrictions and penalties it has.

Other debts. If you have other debt that carries higher interest on a significant balance, re-consider your prepayment plans. Things like student loans, car loans and credit card debt generally carry higher interest rates, so go over your finances, make sure you’re not missing any payments and tackle that bad debt first.

You have other things to save for. If you haven’t saved money to cover emergencies, or if making any extra payments would diminish your quality of life and make handling your finances especially difficult, consider holding off on the pre-payment. Sometimes, saving money in the long run isn’t worth the financial, emotional and personal stress that a money crunch would cause.

Taxes. You may be able to deduct your mortgage interest from your taxes — but if you pay off your mortgage early, your bottom-line might not be as simple as it looks. Talk with your accountant or financial advisor to see what kinds of effects paying your mortgage off early will have come tax day.

Investments. If you think your money could be better spent in another investment, like stocks, other real estate or another business venture, you could put your money towards those instead. Make sure you understand the risk and know that there’s no such thing as a surefire investment. If your return on investment is higher than your mortgage interest rate, you’ll know you made the right decision.

How Do I Pay My Mortgage Off Early?

Now that you’ve gone over your finances, spoken with your financial advisor and talked to your mortgage lender about any side effects of mortgage pre-payment, it’s time to get into the details of how you’re going to do it. Consider these methods:

Refinance your mortgage. Refinancing doesn’t mean you just replace your current loan with one that has a better interest rate and keep paying it off on schedule. While you can do that, consider shortening the term or making larger payments in combination with refinancing your mortgage to pay it off sooner.

Make an extra payment. Just one extra payment per year will do wonders for mortgage balance — depending on your interest rate and term, it could actually shave years off your debt and save you thousands in the process.

Let your financial situation dictate how many extra payments you make — if you can afford to make more than one per year, go for it. You’ll thank yourself down the line.

Save, save, save. No matter how big of a financial windfall you’ve just gotten, being careful and responsible with your money is key to pre-paying your mortgage. And if you haven’t had an influx of funds, it’s even more important. Trim the unnecessary expenses from your budget and put more in your savings each month — you’ll have at least a little bit of money to make a big difference in your loan balance.

Regardless of whether you’re four payments away from paying your home off or 29 years, you deserve the peace of mind that homeowners insurance offers. Get in touch with your American Family Insurance agent (Opens in a new tab) and see how we can protect you, your property and your livelihood.

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    20 Questions to Ask When Renting an Apartment

    Choosing your new apartment isn’t an impulse decision. The choice you make will have an impact for a long time. There are many different things to consider as you tour one possible home after another. On top of that, landlords and management companies work hard to make them all seem perfect.

    How can you tell which one’s the right fit for you? Here are 20 key questions to ask when renting an apartment. The answers can give you a better idea of what you’d get from each one.

    How Much is Rent & the Security Deposit?

    Any apartment hunter should ask themself this crucial question: “How much should I spend on rent?” Setting a budget ahead of the search helps narrow the possibilities. You’ll save time by eliminating options that are too expensive.

    Still, relying on online listings alone may not be enough. It’s better to personally ask the landlord, whether by calling, emailing, or visiting. Make sure to also bring up the security deposit, as well as any other upfront costs they may ask of you. This will save you from unpleasant surprises before you sign anything.

    How Much are Utilities and What Do I Cover?

    Every apartment complex handles utilities differently. Water, electricity, air conditioning, heating, gas, and more may be split between landlord and tenant. Then there is the matter of which ones you’ll need to get yourself. Your apartment may come with cable and wi-fi, but you may be responsible for them on your own.

    Only your landlord will know for sure, and they should be clear about what’s expected of you. Before leasing an apartment, you should ask what utilities are available and which ones are covered. Record the answers, factor the costs into your budget, and look for the place that offers the most for the least.

    How Does Parking Work?

    Some apartment complexes have their own parking lots, with many spaces reserved for tenants and a few set aside for guests. Others may give residents access to a dedicated structure, providing greater security — but possibly at a higher cost. Others still may only offer street parking, which can be expensive to maintain.

    In short, parking may be a complex situation involving specific locations and extra costs. If you have a car, don’t just ask if parking is available. Get the details. As you weigh your options, consider what’s best for your car as well.

    What’s the Pet Policy & Is There a Deposit or Fee?

    The pet policy won’t matter to every apartment hunter. If you have a furry friend or might want one someday, make this one of their first questions to ask when touring an apartment. A “no” answer is no deal, no matter how great the other perks may be.

    Some landlords may allow pets if you pay a one-time deposit or additional monthly fees. Make sure to keep that in mind during your search.

    What Amenities are Included?

    Utilities cover the most vital parts of a home — the things that make living there comfortable. Amenities are the complex’s welcome bonuses — the things that make living there enjoyable. Common examples include clubhouses, swimming pools, public kitchens, communal laundry machines, and fitness rooms.

    Amenities are great for those who use them, but their presence can justify higher rent. As your landlord takes you through each selling point on your tour, ask them whether these perks are included with your price. Also, make sure to consider if you’ll even use them.

    Do I Need Renters Insurance?

    Home insurance is for houses. If you live in an apartment, you look for renters insurance instead. In fact, some places make it mandatory for all residents. Be sure to ask your landlord in advance so you can make any arrangements you need.

    This practice is all about liability. Landlords have their own insurance, but it’s based on their duties and would only cover their share of the damages. Renters insurance offers protection for your living space and your belongings. Even if it’s not required, getting your own policy could bring you peace of mind.

    Can You Describe the Application Process?

    Applying for an apartment can be complicated and time-consuming. You might have to pay fees, undergo background checks and other screenings, and more just to see if you qualify. This may be preferable to the alternative: apartment listings that promise no credit check may be scams.

    You could always learn about each step of the application process as you go. Still, it never hurts to know ahead of time, especially if there are any fees and risks. If anything is unclear, the landlord should explain it to you.

    What Should I Know About Rent Increases?

    A variety of factors can change the value of an apartment. Examples include market shifts, new installations, repairs and replacements of fixtures. Your rent will likely not change for the duration of your lease. Once the time comes to sign again, though, your monthly payments may very well go up.

    This may not seem like a pertinent question when starting a lease. Still, making it one of your questions to ask when touring an apartment could be useful. How your potential future landlord approaches the matter can tell you what to expect. At the very least, it can help you choose whether to look for a new place well before your lease ends.

    What are the Lease Length Options?

    How long are you looking to stay at your next apartment? One year, two years, longer, less? Not everyone has a plan in mind, which means the apartment’s available options may give you an idea of what to expect in the future.

    Landlords always inform apartment hunters about the duration of their lease. However, you might need to probe them for other available options. Be sure to make this one of your questions to ask before leasing an apartment, even if they only mention one length that sounds good. They might have something better.

    Can I Make Changes to the Rental Unit?

    Your apartment may come pre-furnished, but it’s unlikely to be pre-decorated. Few people are content with blank walls and sparse spaces. Most prefer to personalize and beautify their home with art, decorations and other belongings.

    Unlike houses, apartments usually only have temporary residents. The building’s owner may not allow certain kinds of changes, believing they may hurt the unit’s future value. Take the time to go over policies. That way, you can get a better idea of how you’ll make your space feel like a home.

    How Do Maintenance Requests Work?

    Besides rent, tenants might only interact with their landlord through maintenance requests. After all, it’s the complex owner’s duty to keep everything in their apartments running smoothly. If your shower stops pumping heated water or your lock gets sticky, maintenance will get it fixed.

    Asking about the process of filing maintenance requests can give insights to how landlords view this responsibility. Does the process seem straightforward or complicated? Are approvals easy, or do they require a great deal of evidence and demonstration? The answers may reveal how long this landlord will let you live with inconvenience. Few questions to ask about apartments are more revealing than this.

    What’s the Guest Policy?

    In most cases, a guest policy doesn’t apply to someone who’s just visiting for a few hours. It covers situations where someone might want to stay at a tenant’s apartment for a few days or longer. Depending on the terms of the policy, you might even need permission for someone to spend the night.

    Don’t just assume that any landlord would be okay with your best friend crashing on your couch for a while. Get the details on the guest policy before moving in. They’ll tell you what permissions they’d grant and how you can get them granted.

    What’s the Neighborhood Like?

    The oldest real estate myth holds that three factors must guide where you choose to live: “location, location, location.” There’s more to it than that, as this list of questions to ask when renting an apartment should make clear. Still, the area around the complex is important to consider.

    Getting info on the neighborhood is valuable to any apartment hunt. Try to get your landlord’s perspective about any areas of concern. We also recommend exploring on your own, both by car and on foot. See if any useful places are close by, such as grocery stores.

    How Soon are You Looking to Fill the Unit?

    In most cases, you won’t be the only person viewing an apartment. Others have likely received a grand tour, and others may be waiting in line to see the place as well. Landlords might be screening you as much as you’re screening them.

    Landlords are also usually interested in starting a new lease as soon as the current one ends. One way to get noticed is to strike quickly: ask when they’d want you to move in. You should still weigh your options, but don’t procrastinate.

    Do I Need a Cosigner?

    People with rental history have a record that landlords can review. If this is your first time paying rent, they won’t know if they can trust you to make payments on time and consistently. Adding a cosigner to the contract can make it easier. Their signature promises that even if you can’t pay rent, someone else can pay for you.

    Many renters with no history may worry about background checks and credit checks. However, there are some landlords who won’t ask for them. While the answer will likely be a yes, it doesn’t hurt to have it on a list of first-time renter questions.

    What Payment Methods are Accepted?

    Rent payments can take a variety of forms. Before you make any assumptions, though, you should double-check what’s allowed. Each place will have its own policies. Some offer more payment method options than others.

    You might be able to set up a regular automatic withdrawal from your bank account. You might have to do it online. The landlord might accept checks or cards (warning: anyone who only takes cash is likely a scammer). There’s only one way to know for sure.

    What Furnishings & Appliances are Included?

    Preparing for the big move is a big task. It’s not just deciding what to take, but also figuring out what you need to get. Each apartment is different: some come fully furnished with appliances, while others only have a bed.

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    How Much Notice Do You Give Before You or a Representative Shows Up at the Property?

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    What’s Your Late Fee Policy?

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    What’s Your Subletting Policy?

    Subletting is when a renter temporarily moves out and lets someone else cover their lease. A landlord may refuse to rent to your candidate if they don’t meet their requirements.

    Even if you don’t plan to leave during your lease, you may still want to know your apartment’s subletting policy. Life may surprise you. Being aware can save you some time and trouble in looking for someone to take over.

    Know the Best Questions to Ask When Renting an Apartment

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    Even while you’re still apartment-hunting, it’s never too early to start thinking about renters insurance. If you have any questions about that, feel free to contact an American Family Insurance agent. Once you’ve learned what we have to offer, you can get a quote online and get protection for your next home.

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    Woman sitting at table writing a home inventory for homeowners insurance.
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    Your home is more than a roof over your head. It’s where your dreams grow, your family thrives and memories are made. But the possessions you keep inside are important, too.

    Whether you’re renting an apartment or own your home, you’ve most likely got an insurance policy designed to protect your dwelling and the things inside. Should the unthinkable happen and you have to use that insurance policy, it’s important to have a plan in place. And a home inventory list is a great way to get started!

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    What Is a Home Inventory?

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    When your describing the items in your list, remember that the more information, the better. Here’s a quick reference list of the type of information you should include in your home inventory list:

    • An in-depth description of the items. For example, rather than writing down “diamond ring,” be more descriptive, such as: “an emerald cut diamond ring, with white gold shank, accent stones and initials inscribed below the bridge.”
    • Make, model, and/or serial number of the items.
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    Why Do I Need a Home Inventory?

    Whether you’re a homeowner or a renter, everyone can benefit from a home inventory!

    If you ever have to make a claim, a home inventory is a great asset to have, especially after stressful events like theft, storm damage or a fire (take a look at how one renter used their home inventory after facing an apartment fire).

    When you make a claim, you typically submit information on everything that was lost — which can be difficult to do off the top of your head for all your possessions. Remembering to replace your TV or computer are no-brainers, but when it comes to remembering each piece of jewelry in your jewelry box, things tend to get overlooked. Having a personal property inventory will help, along with knowing how to properly insure your jewelry.

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