Mortgage prepaying is a good idea if you don't like giving away all that interest payment to the bank. Some people do not agree with this plan but for those that do not like having debt hanging over their head, mortgage acceleration is a great way to get that monkey off your back.

Let's go over how to do this:

• First, does your mortgage allow prepayment to take place without a penalty?
• Is it to your advantage anytime through the loan?
• What are some of the other alternatives with that money?

Read through your mortgage papers to see if there is a prepayment fee for paying off your mortgage. Sometimes, the bank charges you a certain percentage if the mortgage is paid off in the first 5-10 years. This would include if you were to refinance the mortgage.

Once you find that you can prepay, you can do this in a couple of different ways. One is sending an extra amount with each monthly payment. The other is making lump some payments. Either way, you should make a separate check out to the bank stating that the extra amount should go to the principle of the loan. Follow up by looking at your monthly statements to make sure that the amount is not getting applied to the subsequent monthly installments thus not decreasing your principal.

Is it even a good idea? That depends on how much time you have left on your mortgage. In the beginning of the term, most of your monthly payment goes towards the interest. You would be surprised to know that on a $100,000 mortgage at 6% interest,you would be paying $500 in interest with only $99 being applied to the principal. Making the total amount of money that you would pay for the house over 30 years would be $215,838. That is twice the amount that you originally borrowed. When looking at it this way, it seems like a GREAT idea to pay off your mortgage early.

If you have been paying for your mortgage for over 5 years, you more then likely have already paid a large chunk of that interest. Just do some comparisons, can I make more money on gaining interest in a different account then what I am currently paying in interest on my mortgage? If you can, then you might want to put that extra money into an interest bearing account and let it sit until you have enough to pay off your existing mortgage.

Talk with a mortgage planner or insurance advisor to learn some of the other alternatives with investing that extra money. There are also mortgage acceleration programs that can help you stay on track with paying off your mortgage early. Do your investigating into these options. They can all save you thousands of dollars in interest payments and give you a jump start on your retirement goals.