7 Easy Ways to Pay Off Your Mortgage in Half The Time

Purchasing a home is one of the most important decisions in your life. However, the 30-year mortgage does not have to be a burden. Paying off your mortgage doesn’t have to take forever. Check out these 7 easy ways to pay off your mortgage in half the time. You’ll be able to be a “true” homeowner must faster.

Bi-Weekly Payments

If your mortgage company or its authorized third party has the bi-weekly option, you definitely should take it. By making deductions bi-weekly, you end up making 13 payments a year, instead of 12 payments. The 13th payment will go towards principal only. This will shave years off a mortgage.

Pay an Extra 1/12 of Your Mortgage Each Month

Another option to making an extra payment is to divide your monthly payment by 12 and adding that amount to each payment. If your monthly mortgage is $1200, simply add $100 to your monthly payment. Make sure it is applied to the principal only. This is the equivalent of making one full monthly payment to your principal balance. This will shave off years of your mortgage.

When trying to pay off your mortgage early, always designate extra money to go to the principal of your mortgage. This can shave years off your loan. Click To Tweet

Use Cash Gifts and Bonuses

Apply at least half of all birthday, Christmas, wedding, and/or other gifts to the principal of your mortgage. No amount is too small. These small principal payments definitely add up and will help you pay off your mortgage much sooner.

Income Tax Returns / Stimulus Checks

If you receive an income tax return, apply the entire amount to the principal of your mortgage. An income tax return is typically extra money that has not been allocated in your budget. But sending it to your mortgage, you can get closer to paying off your mortgage than before. If you receive a stimulus check, send that amount to your mortgage principal as well.

Avoid an Escrow Shortage

If you have a shortage in your escrow account, you may have to make a big lump sum payment to the mortgage company or your monthly mortgage payment may increase. Try to avoid an escrow shortage by paying a little extra into your escrow account each month. An extra $50.00 per month may help avoid a shortage. Each year, your mortgage company will do a review of your escrow account. If you have paid too much into your escrow, the mortgage company will return the extra funds to you. Opt to have those funds applied to the principal of your loan.

Don’t Take a Mortgage Modification

Of course life gets in the way of our plans. If you find yourself unable to make your mortgage payment for a few months, your mortgage company may offer you a mortgage modification. Typically you have to be behind by three months to qualify for a modification. Through the modification, they will bring your account current and you may not have to pay any fees or payments for a few weeks. This is a trap. By taking modifications, you are staying in your mortgage much longer than your original loan. In some instances, constant modifications can add multiple years to your loan. Do whatever you can to avoid taking a modification if possible.

Get a HELOC

Although I personally do not recommend this, many people opt for a HELOC. A HELOC is a Home Equity Line of Credit. You must have adequate equity in your home to qualify for a HELOC. People will take out a HELOC and apply the entire thing to the principal of their original home mortgage loan. This will shave years off the loan, but you now have another bill to pay. It’s a little too much like “robbing Peter to pay Paul” in my opinion. But there are several people who live by this option.

I hope you found these 7 easy ways to pay off your mortgage in half the time helpful. Please feel free to ask any questions or leave your suggestions and/or comments in the comment section below.

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