Getting a mortgage and paying it off in 30 years is not the norm anymore. More and more people are loving the idea of owning their homes outright free and clear and taking back their ownership from the banks. Learn these three simple ways to pay off your mortgage early and faster.
We first learned of the concept of one paying off their mortgage from Dave Ramsey. After we took the time to run some numbers on an amortization mortgage calculator we were sold on how quickly we could really pay off our mortgage by implementing these simple and doable techniques.
We don’t plan on being normal and waiting 30 years to pay off our house. instead, our goal is to pay off our house as soon as we possibly can. As a result, we have figured out three super easy strategies that you can use right now to eliminate your mortgage at a much faster rate.
In fact, check out the video below for full details.
1. Roundup Your Monthly Mortgage Payments
Take your current mortgage payment, and round it up to the nearest hundred. Thus you can apply the extra money towards principle.
Example: If your mortgage payment is $880 a month, round up your monthly mortgage payment to $900. However, you must ensure that the extra $20 is credited towards the principle of the loan. Hence, that’s an extra $240 a year going towards your principle!
2. Bi-Weekly Payments
Contact your mortgage company, and find out if you can make bi-weekly payments without an extra charge. Your mortgage payment stays the same each month. However, the note is paid in half payments twice a month.
Example: If your mortgage payment is $1000, send in $500 every two weeks. Most times, it is easier if you have these payments paid automatically from your checking account.
By the end of the year, you would have paid 13 payments as opposed to 12 payments. Therefore, the extra month’s payment will be applied towards principle, taking 7 years off of your 30-year mortgage obligation.
3. Make an Extra Principal Payment of $100 a Month
Take $50 each paycheck, and pay it towards your principle payment. Moreover, find creative ways to save $100 each month, so that you can apply it towards your mortgage. Additionally, you can eat out less, lower your cell phone bill, and sell items on Craigslist!
