How to Pay Off Mortgage Faster - dummies

How to Pay Off Mortgage Faster

By Eric Tyson, Robert S. Griswold

If you believe you want to choose mortgage payoff faster than is required, this information is for you. If you’re certain that you want to pay down your mortgage balance quicker, it can be as simple. Here’s a few tips that show how to pay off your mortgage faster:

  • Making an extra mortgage payment: If the stars align or you find yourself with extra funds, you can make an extra mortgage payment. This will go towards your principal balance and can help lower the amount of interest significantly.
  • Sending in a regular additional amount: You can choose to add a certain amount of money on to the top of your payment to speed up your mortgage payoff (such as $100 more). Escalating your mortgage payoff in this fashion can cut down the length of the loan and the amount of interest you’ll pay.
  • Sending in extra money less regularly: If you have a variable income, you might consider paying extra when you have extra cash (like when you receive that quarterly or annual bonus).
  • Paying the mortgage in full: If you have enough money to do so, you can always pay the remaining mortgage in full to eliminate monthly mortgage payments.

You can mix and match these practices. Just remember, though, that once you send in extra money or pay off the loan in full, you can’t take it back!

If it’s important to you to understand how much sooner your mortgage will be paid off because of the extra payments you’re making or plan to make, you can contact your loan officer (who should be able to do those calculations), contact your mortgage service company and ask it to do some calculations on your behalf, or use an online amortization calculator.