40 | MARCH 25 • 2021 

B

uying a home is 
a major life step. 
Homes are by nature 
expensive, and most home 
buyers cannot afford to 
purchase a home outright. 
Because of that reality, most 
home buyers finance a home 
purchase with a mortgage. 
A mortgage allows you to 
spread the payments for 
a home loan across many 
years. The result? Mortgages 
can make home ownership 
much more attainable for the 
average home buyer.

WHY NOW IS A 
GREAT TIME TO BUY
Currently, mortgage rates 
are at historic lows, meaning 
that the cost of borrowing 
funds is lower than it has 
been in previous years. If it 
fits within your budget, now 
is a good time to purchase 
a home. In fact, Vanderbilt 
Mortgage is offering new 
home buyers who choose to 

finance their home purchase 
with Vanderbilt 60 days 
with no payments after 
their mortgage loan funds. 
This provides a new home 
buyer time to settle into 
their new home and pay for 
the costs associated with 
moving — without having to 
immediately account for their 
first mortgage payment.

BENEFITS TO PAYING A 
MORTGAGE OFF FASTER
While mortgages definitely 
make sense for most home 
buyers, there are advantages 
to paying off a mortgage 
before it reaches full term.
Why?
Because paying down your 
mortgage early:
• Builds equity for resale. 
Paying down the principal 
balance on a mortgage can 
build equity in your home 
faster. Equity is defined 
as the market value of the 
home, minus the amount 

owed on the mortgage. For 
example, if your home is 
worth $150,000 and you owe 
$100,000 on the mortgage, 
then you have $50,000 worth 
of equity in your home. This 
equity can then be utilized 
when you sell your home 
for a down payment on your 
next home. In addition, 
some of the equity could be 
used to qualify for a home 
equity loan to make home 
improvements.
• Frees up cash for later. 
Another benefit to paying 
down your mortgage earlier 
is reducing the years the 
mortgage is active. Paying 
the mortgage off earlier 
will free up the money that 
was needed for a monthly 
mortgage payment, allowing 
that money to be spent on 
other items — or saved for 
retirement or an emergency 
fund.

HOW TO DO IT
If you’re interested in paying 
your mortgage off more 
quickly, here are two common 
strategies you can use:
• Extra payments every 
month. A more common 
way to pay a mortgage 
down early is simply to 
make extra payments to the 
loan’s principal each month, 
as frequently as possible. 
Whether it’s $5 or $100 extra 
per month, every additional 
principal payment you 
can make toward paying a 
mortgage down more quickly 
really adds up. To show 
you how that would work, 
Vanderbilt Mortgage has 
developed an early payoff 
calculator to show how much 
you can save by paying extra 
toward the principal each 
month.
• Annual Additional 
Payments to Principal — 
You can also help pay your 
mortgage off faster by making 
extra payments to principal 
once a year. Whether it be a 
tax refund you receive, yearly 
bonus or extra savings, this 
investment toward paying 
your mortgage off sooner can 
help save interest cost in the 
future.

GO AT YOUR OWN PACE
It’s important to remember 
not to overextend yourself 
while you’re working to pay 
a mortgage down. Create a 
realistic budget and go at 
a pace you can afford, and 
you will reap the long-term 
benefits. Your future self will 
thank you! 

How to Pay Your 
Mortgage Of
 Faster

BPT/BRANDPOINT

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