Being Mortgage-Free Sooner rather than Later

Have you ever asked yourself when you are going to be mortgage-free?

Although you may have heard of several strategies or tricks on how to pay your mortgage faster, in reality it comes down to putting more of your own money against the mortgage. The question is, how to do it without really feeling it so much? In my opinion, here is what makes a real change.

Monthly mortgage payments can be quite a hassle, since they always seem so large. Somehow, it seems easier to make a $500 payment biweekly than a $1,000 monthly. Well, it not only seems an easier payment, but the $500 biweekly payment is also a larger payment that $1,000 monthly - the true equivalent of $1,000 monthly is roughly $462 biweekly. The fact that you are paying $500 means that you are making a biweekly accelerated payment, where the additional $38 goes directly to the principal of your mortgage. This will cut off some 4 or 5 years of your original amortization.

A similar approach applies for weekly payments. Try to make accelerated payments, if you can.

Once you determine your payment, round it up to the next $10, $50 or $100, again, if you can afford it. Whatever you pay extra goes directly against your principal.

Finally, try to make an occasional lump-sum payment. When you do that, all of your lump-sum payment goes directly against your principal.

 

 

 

 



### Posted on: October 30, 2012 by Tino Brelak.

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