i have a 30 year mortgage. I heard there's a way to take years off your loan without paying any more per month

Answer 1

Yes, there is a way to pay off your mortgage faster, but before doing so, you should check if your mortgage has an early prepayment penalty or some sort of penalty for paying the mortgage off sooner. If you are willing to accept this penalty (if it exist), then here are couple ways you can pay off the mortgage sooner. All these payment options may include a fee.

1) You can pay bi-weekly. That means, your monthly payment is split in half and you pay this amount every 2 weeks. Most people get their paychecks every 2 weeks, so this is a good option for them. Total payments in a year: 26 payments.
2) You can pay bi-monthly. That means, your monthly payment is split in half and you pay this amount on the 14th or 15th day and on the 28th or 30th day. Total payments in a year: 24 payments.

So instead of paying $900/month on a mortgage, you can pay $450/month every few days or so. You should get an amortization schedule when you pick these payment options.

Some people worry what their interest rate will be and this is how mortgage companies play with people's minds. When the issue is really how soon can you pay off the mortgage and what is the total cost of the loan (total interest plus loan amount)? Interest rate should be the third factor in getting the loan. "Its not the interest rate that matters, its the rate at which you pay." How fast are you paying this mortgage? If you pay monthly, you are in it for the full term. If you pay it bi-weekly, you will take some years off the mortgage.

Answer 2

There is. It's called a semi-monthly payment plan. I don't think all mortgage companies have one, but basically it works like this: your monthly payment is divided in two, and paid on the 1st and 15th of the month. My mortgage company offers it, but the only stipulation is that the payments are taken out by automatic bank draft. If started at the beginning of your mortgage, it can take as much as 7 years off your payments.

Answer 3

I think what you may be referring to is paying semi-monthly, meaning making 2 payments per month. The total amount will be the same, but you'll end up paying less interest. Not all lenders offer this option, and some lenders may even charge you for the "privilege", so you'll need to check with your loan company. Also, maybe you could run the amortization schedule on http://www.bankrate.com to see how much you'd be saving.