How to Pay Off Your Mortgage at Lightning Speed

Did you know that about 34% of homeowners in America are living mortgage free? Ever wonder what it would be like to live without that payment? You may wish to review the terms of your mortgage today! It may seem like it will take forever to pay it off, but paying off your mortgage early is completely impossible by making a few simple changes you will soon be on the road to becoming mortgage free!

#1 Set Some Goals

Decide how fast you want pay off your mortgage! Keep in mind that most mortgages are based on a 30-year repayment plan. How soon can you afford to pay it off? Maybe five or 10 years early? Knowing how soon you want to pay it off will allow you to figure out how much money you need to add to your monthly payment to accomplish the goals you’ve set.

#2 Cutbacks

I know everybody hates them, but if you are serious about paying off that mortgage fast, you are going to have to cut back on buying things that you don’t need. Whether it’s that morning coffee or subscription to a monthly magazine. There are probably a few things you can come up with that simply are not needed. Saving an extra $50-$100 per month that could go directly into that mortgage payment!

#3 Get Detailed Budget

Now that you have set a goal and cut back some items you clearly do not need, you can begin planning your budget. Calculate your monthly income against your monthly expenses. If you already have a budget, this is the perfect time to review it! Figure out how much more you can add to your monthly mortgage payment.

#4 Bonuses and Tax Refunds

Throughout the year many of us receive bonuses, tax refunds, settlements, and other large contributions. Something you may want to consider is contributing those large payments to your mortgage. These large chunks will visibly decrease your monthly payments and/or put you ahead of schedule for your loan payoff date. Every bit can assist do decrease your loans length of time and attack the principle sooner saving you money.

#5 You may want to Refinance

Refinancing gives you the ability to obtain a better interest rate if you are approved. It also provides you with better alternatives like converting your variable rate mortgage to a fixed rate mortgage or your 30 year mortgage into a 15 year mortgage. Yes, taking your 30 year fixed-rate mortgage and refinancing to a 15 year fixed-rate mortgage may actually be less per month and have that mortgage paid in just fifteen more years. With the right equity and interest rate refinancing may be a perfect option for you.

Ask for Help

Speaking to a professional is very important when you have questions. He or she will inform you of things you may have missed or forgotten in your mortgage agreement, like prepayment penalties, hidden fees and other items that can cause additional costs.

Don’t be afraid to ask questions and seek help when you need it!

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.