Is There a Secret, Easy Way to pay down a Mortgage?

Question

maybe by paying next months principal?

Answer 1

Yes, in fact there is a secret easy way to do this... BUT, check with your particular lender first, since some lenders have a policy preventing what I am about to share. Here's what I recommend... Instead of Paying your mortgage on the 1st of each month... Pay Half of your mortgage on the 15th, and the other half on the 1st. NOTE - this should NOT delay the mortgage payment... If you've made your July payment in full on the first of this month, pay half of your August payment on the 15th of July, and the other half on August 1st. On a 30 year mortgage, over the life of the loan, this will actually cut 8 years off of the mortgage term. (YES, really) and you haven't paid MORE. If you have the means to pay extra on your loan, write in the comment section on your checks "Payment plus principle". This will help ensure any extra monies you pay will go towards the balance of the loan itself, rather than simply paying interest.

Answer 2

First - to be safe in case you lose your job, don't start prepaying your mortgage until you have at least 6-12 months of living expenses in savings.

If you have a really low long fixed interest rate mortgage you might not even want to prepay. But I'd say don't do that unless your fixed rate mortgage is 30 years and has an interest rate below 5.6%.

All that said if you do want to prepay it does feel great to have no mortgage. Round up to the nearest round number on the check, double each principal payment. Each time you double a principal payment it eliminates one FULL payment at the end.

Answer 3

I did myself a spreadsheet. I took my mortgage payment and rounded it up to the nearest 50 dollars. I made the first 12 payments at that amount. Starting year two I added another $50 to the amount I was paying, and did it again in year three. Per my spreadsheet, just adding $50 to my payment each year or just an additional $600 per year I will pay off the 30 year mortgage in 16.5 years.

Ex: Mortgage 915/mo.
Year 1, Pay 950
Year 2. Pay 1000
Year 3. Pay 1050
Etc.

In 2.5 years I have paid almost 7,000 in principal.

Answer 4

You can shave approximately 6 years off your 30 year mortgage if you go with what's called Bi-Weekly Payments.

Basically, you make a payment for Half of your monthly mortgage payment every two weeks (not on the 1st and 15th of every month, but literally every two weeks).

There are 52 weeks per year, which would make 26 half payments. That's 13 full payments per year. That 13th payment will go directly to your principal only.

Of course check with your lender about whether they accept this type of payment program. I know some excellent programs that offer this.

Answer 5

Pay half your mortgage every 2 weeks. In the end you make an extra payment, but in doing it bi-weekly, your interest goes that much faster.

I LOVE this site http://jeacle.ie/mortgage/ You can put in your principal and terms and it will show you how much time and interest you save by paying extra, you can try out different amounts and see what works best.

Good luck :)

Answer 6

The best way is to put extra money toward the principal. Even an extra 50 dollars will make a dent in the long run.

Answer 7

Hi opYankees,

loving father is correct, however be very careful about the arraignment with your lender.

MAKE SURE that you get it in writing.

If they do not agree, the will hold the first semi-monthly payment in a
suspense account, and it could cause you to roll late.

I have pulled people away from the lender they were with because they were told to go ahead and it would not affect their credit. I then have mortgage lates on their credit report to deal with when I place them into a new loan.

Good Luck,
~Trey

Answer 8

If you pay one extra principal payment per year you can take a 30yr mortage down to about just under 20 i believe.