How to Pay Your Mortgage Faster

How to Pay Your Mortgage Faster

Paying off a mortgage faster can save hundreds if not thousands of dollars in interest payments. No matter your situation, with a bit of effort and careful planning you can accelerate your mortgage payment and be debt-free in record time.

Steps

1. Review your mortgage terms and figure out how much you need to pay to reduce your overall loan principal.
2. Calculate how much you can afford to add to your mortgage payments each month after accounting for other bills and expenses.
3. Formulate a plan for raising the funds for extra payments. Do you plan to shift the money from savings or invest less or perhaps earn a second income?
4. Pay your mortgage biweekly instead of monthly to reduce the amount of interest you pay each year.
5. Incorporate lump sum payments in your budget so you can pay off your mortgage faster.
6. Make a large principal-only payment each year.
7. Set up an escrow account for extra payments so you can build up overtime.
8. Partner up with friends or family and make collective payments on your mortgage.
9. Refinance your mortgage with a shorter term mortgage loan.