Title

9 Simple Ways To Be Mortgage Free In 10 Years

Imagine Being Mortgage Free!! Here Are 9 Simple Ways To Pay Off Your Mortgage Sooner

Of course the speed with which you pay off the mortgage depends on its size. But every little helps.

1. Pay off weekly or bi-weekly rather than monthly. In effect you make 13 “monthly” payments a year, not 12. The mortgage will be paid off in just under 21 years rather than 25.
2. Increase the mortgage payment by the same percentage that your income goes up. 5% raise? Pay off 5% more each week or month and this directly reduces the principal.
3. Pay off some of the mortgage with any windfalls or bonus. Again this can be as a percentage. If normally 25% of your income goes towards the mortgage then use 25% of a bonus as a prepayment.
4. Even if the mortgage rate lowers keep the payments the same. Again the difference directly pays off principal.
5. Pay off a lump sum with any tax rebates.
6. Simply decide to pay an extra amount each month. Cut out a large Timmies each day and pay an extra $50 a month off the mortgage.
7. Add just a little to each weekly payment by rounding the figure up. $375 instead of $362 for example would equal an extra $676 a year off the principle.
8. Choose a closed mortgage rather than an open one; these generally have better rates and still allow you to pay off an extra 20% or so in prepayments each year.
9. This tip depends on your attitude to risk but choose a variable rate rather than fixed. The interest payment will be much lower.  Studies show that historically home owners with a variable rate pay less interest than those with a fixed rate mortgage. But you may loose some sleep when rates start going up

This entry was posted on Thursday, September 2nd, 2010 at 11:15 am and is filed under Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply