It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!
PART ONE – Lower The Interest Rate
PART TWO – Pay 10% Extra Each Month
PART THREE – Pay One Extra Payment Each Year
One of the most common ways that people get rid of their mortgage is by sending in one extra payment each year. This will eliminate 5 to 7 years from a 30-year fixed rate mortgage.
You can send one extra payment each year using a variety of methods:
- Send in one extra payment when you receive a tax refund or profitability bonus
- Since this money is extra and not part of the normal budget, it’s easier to put this money immediately towards the mortgage.
- Set up 1/2 payments to be made every two weeks
- Since there are 26 two-week periods in a year, this means that 13 full payments will be made each year. Presto! An extra payment!
- Send in 1/12 (8.3%) extra on each monthly payment.
- 1/12th payment/month X 12 months = 1 full payment per year
You can run the numbers for your specific mortgage by using the Early Pay-Off Calculator. This is a great tool to discover how much sooner you could be debt-free by making extra payments each month.