I owe on a 30 year home loan 250,000. What is the easiest way to pay it down?

Question

I know of the sure fire way which is add to the principal each month, however, any other solutions? I would like to pay it off in 15 to 20 years.

Answer 1

Adding principal every 2 months or 6 months ?
Whenever , does not matter .
Adding principal is the ONLY way to pay it down.

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Answer 2

Actually, I would highly recommend against paying it down. You are much better off putting that money into a retirement plan or some time of investment instead. If it was credit card debt or any other kind of bad debt, I would agree to pay it down as fast as possible. However, most mortgages are at under 7%, plus they're tax deductible. Credit cards are usually 12% and higher and there is no tax benefit. Let's say your mortgage is at 6.5%. If you put that extra money into an IRA or 401k plan at work, even in a realitively conservative investment growing at an average of 8-9% a year, you will make out better. It is growing faster than the interest you are being charged on your mortgage, plus you are getting compound returns.

Answer 3

Quickest and easiest way to to rifi with a bi-weekly loan. A thirty year loan turns into a 22 year loan. A fifteen year loan goes down to 11. This is the same as adding an extra payment each year in the amount you pay, but the interest is refigured every two weeks and not every 30 days.

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Answer 4

Due to the laws of mathematics and finance, only paying off additional principal will get rid of it. If you can't do this yourself, monthly, or when you get additional cash (e.g., treat any raise as not having been received - devote 100% of this case to principal reduction only, not to a nicer car, more vacations, etc.), then refi into a 15-year mortgage to force yourself to do it, assuming you can afford the payments.

The only other way to pay faster would be if interest rates dropped, and you could refi into a lower rate loan.

Answer 5

There is NO easy way.
The ONLY way is to pay down principal faster.

Realize that any money you pay into principal is money that is tied up that may be hard for you to get to, if you ever need it.

Depending on your overall financial situation, Paying it off sooner may not be the best thing for you to do.

A 30 YR payment that was fixed 15 years ago is much lower than it would be if originated today.
Hopefully, You pay it back with "cheaper" dollars.

Answer 6

Adding extra to the principal every month is the only way I know. I paid mine off 7 years early. You might get there in 20. Hoping to cut it in half at 15 years may be hard to do. You can still shave years off with just an extra $100 a month.

Answer 7

making just one extra payment a year will take 13 years off of the loan, make it in extra payments each month or one lump sum. always pay a little more and specify that it goes to principle, with that you will see it go down fast because, your loan is set up so you pay the interest up front, if your principle is lower each month the interst is lower than more and more goes to the principle, it is slow but it is a huge benefit

Answer 8

No other solution. Adding to the principal is the only way to pay it down. Just pay as much as you can whenever you can.

Answer 9

Just pick a month, to double your payment. I believe that lowers the term of the loan substantially. That would only be once a year, or divide the payment into 12 and pay that amount every month if that is easier.

Answer 10

This is exactly what I wanted to know, so I went to bankrate.com and click on the mortage payment calculator. By entering your mortgage info.(amount, rate, years). It shows you how long it will take to finish the loan depending on the amount you want to make, it can be an extra monthly payment, an extra annual payment, etc. This is how I was able to find out that by making an extra annual payment of XXX, I will be done in 20 years. I hope this info. will help you, as it did to me.