Being in the mortgage industry for 12+ years has insured I know a thing or two about paying off your mortgage early, this is a question I get all the time as a Mortgage Loan Counselor. There are a few different approaches you may want to take, depending on what is most conventient for you. See my ideas, and if you have any questions don't hesitate to ask!

Refinancing your mortgage to a shorter term, say from thirty to fifteen years, can dramatically reduce the time required to payoff your mortgage. Your payment may go up a little due to the change in terms, so be sure your pocketbook can handle it. With today's rates at an all time low, you get a little added bonus, so if you are planning on this approach, you may want to act fast and get a low rate locked in. Also, rates are typically, not substantially, lower on shorter term (20, 15, 10 year) mortgages.

The only downside to this option is that you will have to pay closing costs and prepaids (escrow holdback). Unless you are planning to do a "no closing cost" refinance, wherein the closing costs are added to the principal of your loan. Again, make sure you are aware and ready for your mortgage payment to increase, but could you have expected anything other than this? You’ll be paying off your mortgage significantly faster, so it only makes sense that you’ll pay more monthly.

 I know it sound simple but let me explain. The trick here is, sending in half of your monthly mortgage payment every two weeks, you will end up making what adds up to be an extra payment every year.

If you don’t believe me, do the math yourself. Instead of making 12 monthly payments, you’ll make 26 biweekly payments, which is the equivalent of 13 monthly payments. This will hedge years off your mortgage. Also, if you’re paid on a biweekly basis, this approach could be better for your budget than once a month payments.

The only downside I see in making these biweekly payments is that, although many lenders offer these sorts of programs, most of them charge a fee for the "privilege" of doing so.  It may seem easy to justify these fees based on your long-term savings, but there could be a better option.

 Try sending in an extra 10% of your total payment as an additional principal payment every month, again, do the calculations and make sure it will not stain your pocketbook. Ultimately, this works out to be roughly 1.2 extra mortgage payments every year — this option is on the same line with the biweekly plan, but without any additional fees. If you’ start sending a fixed amount everything month, this is very easy to control and get into the rhythm of.

This idea goes something like this, when you are writing your check out for your mortgage, send an additional check equal to next months principal. If you’re not sure what next month’s principal payment will be, just use the amount from the month you are currently paying, that’s close enough. Your mortgage statements should break this down for you, listing the amounts going to principal, interest, and taxes/insurance.

The advantage with this approach is that it puts your mortgage payments into overdrive. Over time, the amount you are paying toward principal will increase every month, meaning that you’ll pay down your mortgage faster and faster.

Whenever you run across a small amount of luck or extra money, forward it to your mortgage company as an extra principal payment. Get a check from your credit card reward program?  Send it in. Get a tax refund? Send it in. Find ten bucks in the gutter? You get the idea. Send it in.

Aside from the fact that this approach doesn’t put any additional strain on your budget, it can be kind of fun. However, this approach is generally less effective than the other alternatives. After all, these additional payments will typically be smaller, and will come at somewhat random intervals.

The above mentioned methods are no means the only approaces you can take to paying your mortgage off early, but they are great starting points. Let me know if you have any other ideas to add in the comments section. If you are planning on using some of the advise I have offered please let me know how it works out for you in the long run.