Work on paying off your mortgage faster

Paying off your mortgage faster is one of the most beneficial strategies you can apply to your financial plan. The sooner your pay off you mortgage, the less interest you end up paying to your bank. The savings can be absolutely massive. Once you’ve got that darn mortgage paid off, you’ll have more money to invest towards your retirement. Just as an example, say you were to pay an additional 30 dollars a month on your mortgage, you would save over $10,000 dollars in interest expense over the years of your mortgage amortization. Can you spare 30 buck in a month’s time to save that much money? Of course you can. Be creative. Just going out to the movies for a night costs that much. Skip a movie night and apply the funds towards your mortgage. Easy as pie.

Here are some additional mortgage pay off tips for you to consider:

Pay more every month

Most lenders allow their borrowers to pay additional money towards their home loans every month. Call you lender and ask as to how much you are allowed to pay and what the procedure is to do so. You need to get in a state of mind with an ultimate vision of being mortgage free. Make it your mission. Like in the example above, think of more ways to put money towards your mortgage. Do you smoke? Smoke less and put the money towards the mortgage. What things do you spend cash on that you can cut back on? You’ll be surprised at how much you have if you really work at this. It is not uncommon for someone to double their mortgage payment every month. Wow! Talk about accelerated mortgage pay-down. You can actually knock a decade or more off your mortgage term and several tens of thousands of dollars of interest expense. Just going from $850 a month to $1050 a month on a 125,000 dollar loan at 6% will save you over $45000 in interest and 8.75 years in payments. This is serious stuff were talking about here!

Get a lower rate

Talk to your preferred mortgage broker and see what kind of rate he can for you. You’ll want to calculate the savings between you existing rate and the new lower rate. This works best at mortgage renewal time as there will be no mortgage payout penalties to deal with. If you renew mid-term, make sure you calculate the cost of any mortgage payout penalty you may encounter. You mortgage broker can help you figure out a strategic plan that makes sense for you particular situation. Make sure you keep your mortgage payment at least the same as it was before at the higher rate and then some, if you can afford it. This will speed up your mortgage pay off significantly. You’ll also want to make sure you go with a bi-weekly payment plan as well to get more payments in per year. Every little thing helps in a big way. Just going from monthly to bi-weekly payments can save you  more  than 20,000 dollars in interest savings.

Use windfall money and bonuses towards you mortgage.

If you receive any unexpected money, put it towards you mortgage loan. Talk to your lender first and inquire as to how much you are allowed to put towards your loan every year with penalty. This can vary broadly from lender to lender but can be as much as 25% of the original loan amount. This is an enormously powerful strategy that will speed up your ability to be mortgage free by leaps and bounds.

Get rid of bad debt and apply your new found cash-flow towards your mortgage.

It is a great idea to refinance your mortgage to pay off credit cards and other high interest debt. The payments you make every month on these garbage loans can be huge. Using your home’s equity to pay these debts off makes a lot of sense because the interest on your home might be 5% while the interest on those cards can be as high as 27% or more. Once you’ve paid off the high interest loans, you can then apply all the money you were wasting paying interest on paying your mortgage back down. You will effectively paying principal instead of interest. What a concept!