How To Pay Mortgage Early

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  1. HubPages profile imageSTAFF
    HubPagesposted 15 years ago

    How To Pay Mortgage Early

  2. lynnied2 profile image60
    lynnied2posted 15 years ago

    To take years off of your mortgage, you have only to pay one extra monthly payment per year. You can pay it all at once, or break it up into twelve payments.

  3. Chuck profile image81
    Chuckposted 15 years ago

    Most mortgage loans have payments due every month while most people get paid every other week (bi-weekly).  As a budgeting convenience, some advisers suggest that people pay half their monthly mortgage payment with each paycheck.  This bi-weekly mortgage payment method is not only convenient but also a way to pay off a mortgage faster while saving thousands of dollars in interest charges without feeling like you are paying anything extra. read more

  4. RNMSN profile image61
    RNMSNposted 15 years ago

    My dad always said to pay as much as you could every month and if you get any tips or bonues that get sent as well,but all I could ever manage was to send as much more than the mortgage asked for...never much...a hundred, sometimes only rounded to the next hundred...but that would at least put a bit more escrow in for the year which is how the banks increase your monthly mortgage in the end...especailly in the south/tornadoes,hurricanes etc there is always a "reason" to increase the taxes and insurance  so the sheet you get at closing?the one thats so pretty saying your mortgage will decrease over time?that is not the whole story mortgage payment might go down but everything else goes up.One the other had,as my dad always said whenever I got  up a full head of steam about this subject...oh every YEAR! hewould remind me rent always goes up too and where would I like to live in my   80's? a dump apt or my own home?  I am ashamed to say           sometimes I'd mouth at him ad say stupid things like I could move from dump to dump at least but with a house I'd be if in my 80's I'd be physically able to pack and move and unpack etc/its a no win situation I'm afraid especially te older I become ( but arent I well preserved for my age?lovey picture eh? ha) but the bank have us with that problem now as well, wht ith the reverse mortgage eh?    and so I am still of te opinion that if at all possible the huse we are payng for mow will please please sell  so while hubby andI are still   in our 50's we can at least get  where we would like to stay for the next few decades,without yardwork,without worrying about leaks,electrical,foundation,appliances reaking nd no way to fix I aid, its a no win situation/espcially if you aren't wealthy

  5. Quilligrapher profile image71
    Quilligrapherposted 15 years ago

    The technique I use works very well for me.  I make my mortgage payment every 4 weeks instead of once a month.  That works out to one extra payment each year.  The savings in interest is substantial. 
    For example, if you were to start this habit during the first year of a 30 year mortage with an interest rate of, say, 5.0%, that one extra payment would reduce your gross interest 1-1/2 times the amount of your payment.  Each year, as your principle is reduced your interest saving is a tad less. Just to make the  math easier, let's assume the mortgage payment was a constant $2000 for all 30 years which, of course, it isn't.  At the end of 30 years, your total interest will have been reduced by about 20 times the amount of the payment.   You stand to save about $40,000. Cool savings! All calculations are estimates and your actual results may vary.

  6. Donna Steiner profile image65
    Donna Steinerposted 15 years ago

    You can make one extra payment each month as suggested below and also pay weekly/fortnightly instead of monthly.  You can also use a line of credit or revolving credit.  To do this you put all your income in this account and defer paying expenses by credit card, all of the extra money in the account counts towards the mortgage until it is withdrawn.  Note only get a line of credit if you are good at managing money otherwise you could get into trouble.  Click on my account for details.

  7. Balinese profile image40
    Balineseposted 14 years ago

    I always pay extra my mortgage every month and  some time pay a chunk   for full year,  i  have to be cruel  and mean with my   personal spending habit- so i can  pay off my mortage bit earlier - cannot wait to be free from mortgage.
    you pay less interest  in total you supposed to be .

  8. profile image0
    twdepewposted 14 years ago

    When you understand how interest works on a mortgage, you can begin to get your hands around the best way to get it paid off.  As Quilligrapher suggested below, making payments every four weeks rather than monthly will make a substantial difference because the extra payment goes against the principal, not interest.  Since the interest portion of your mortgage payment doesn't change for a given month, anything over and above that amount shortens the mortgage term and increases the equity in your house.  Once you understand the time value of money, you can see how a little effort early in the loan yields big benefits at the end.

  9. Jeff Ragan profile image61
    Jeff Raganposted 14 years ago

    Paying off your mortgage early is the best investment out there today.

    If you just stay focused on using a system, i.e. pay extra principal each month, 13 payments year or what ever you choose, keep it up and you will get there.

    It's a very good feeling to be paid off on a mortgage and debt free. I know, it's been my experience.

    Stay liquid, find safe investments after you pay off the house and save for retirement.

    Best Wishes,


  10. profile image58
    no more mortgageposted 14 years ago

    First ask yourself why you want to pay the mortgage off first. Paying off your mortgage simply means sending in more than is due and there are many ways to do that. But make sure that is the best strategy for you. Let's take a look at what I mean by that.
    If you have other debt such as credit cards, auto loans, personal loans, almost any other debt that you are paying interest on, you need to question your desire to pay off the mortgage before those debts. Your mortgage is a simple interest debt that is often the largest tax deduction you have. Also, paying extra money against your mortgage does not lower your payment, and if you need access to money in an emergency you can only get that money back by refinancing, if you can qualify in today's difficult market.
    If you ever get in financial trouble, you're better off to have cash on hand or access to credit you've paid down than to have sent in your extra cash against your mortgage.
    Paying down your mortgage does build your equity, but many people have lost their home in a financial crisis despite the fact that they had paid their mortgage down. In fact, if the bank has to consider foreclosure on 2 homes they are going to be more likely to sell the one with the most equity since they stand to take less of a loss, or even make money.
    You also need to have a financial planner or professional look at your retirement picture before deciding to pay down your mortgage. Your extra money may be needed to prop up your retirement account rather than going against your mortgage.
    My point is, unless you have no other debt and you know for sure your retirement fund is where it needs to be, seek a professional opinion before putting your extra money against the mortgage.

  11. profile image57
    fasthardmoneynycposted 14 years ago

    I agree with no more mortgage, in my opinion he has given you the best advice for Free.

    I would not do anything without consulting first with a fianancial advisor who takes care of your taxes and financial planning.

    This is your one biggest tax write off, and this needs to be reviewed carefully before taking any ones advice other then a financial planner if possible.

    If money is an issue, you can just take what no more mortgage wrote to your account, mortgage broker, banker to see who can help you make sense whether you should pay off earlier or can that extra payment be used some other way more beneficial...move slow and cautious.;>)

  12. profile image57
    Lmootposted 14 years ago

    The benefit of paying your mortgage off early depends on your situation IMO. In my instance my 30 year mortgage is only $330 a month. My total monthly payment including taxes and insurance is almost half of what rent would be for my house. $330 is what most people's car payment is so I don't really see a benefit of throwing money at such a low mortgage when it could be better used investing, doing renovations without financing, and just being able to have more in savings. I also don't plan on staying in my house for more than 7-10 years maximum and as of now I can't afford to pay it off in 7 years so I would be putting extra money towards paying off the mortgage without experiencing the benefit of living mortgage-free. I also won't be paying 30 years of interest so that big scary interest total at the end of the ammortization isn't so scary because I won't be paying that entire amount. I think paying off the mortgage early works best for people who will be retiring soon and will be staying in their homes indefinitely, or years after the mortgage is paid off.

    Just like some may value the psychological value of paying off (or paying extra) on their mortgage, I get my psychological kick out of seeing my liquid savings grow, seeing my 401k grow, having money on hand etc. And since my mortgage, and therefore my interest is such a low cost, I  have reason to believe that I could come out better with a combination of the interest tax break, rate of return from investing the money instead of giving it to the bank to invest for themselves, and having money on hand to improve the value of my house (I have a semi-fixerupper) without having to finance any of it so I can sell it for more and not owe any on HELOCs or improvement loans.

  13. profile image0
    shazwellynposted 14 years ago

    So, you are looking for the best mortgage reduction information? Here you will learn how to use an interest only mortgage to benefit you.  It is all about you and going with the winds of change in your life with the core aim of becoming mortgage free! Learn more in this article. read more

  14. profile image0
    shazwellynposted 14 years ago

    This article recommends some best mortgage reduction tips. Learn how to pay off your mortgage early here! read more

  15. profile image0
    shazwellynposted 14 years ago

    Learn how to pay your mortgage early with these practical tips to mortgage reduction with videos! This is a simple guide that will help you to become mortgage free. read more

  16. Judy_Shilmar profile image60
    Judy_Shilmarposted 13 years ago

    Make yearly principal payments.
    Another way to pay off your mortgage is to make one or two extra payments on the principal every year


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