How to Pay Off Your 30 Year Mortgage Early
If you have a conventional 30 year mortgage, this article will show you how to save money paying it off early. There are a few different options to pay off your mortgage early. These options and instructions are listed below.
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Instructions
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*Figure out how much you will pay extra each month.
Go through your monthly budget and find out how much extra you can afford to pay each month. Then adjust your monthly payment accordingly. -
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*Pay extra with your payment monthly through the mail.
When you mail in your payment, just write out your check to include the extra amount. Make sure you check your monthly statement to ensure the extra amount you are paying is coming off the principal balance. I recommend including a note with mailed payments instructing that the extra amount be put toward the principal balance. -
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*Pay extra monthly with automatic withdrawals.
If your payment automatically comes out of your checking account every month you just need to contact your lender and change the payment amount. Make sure when you contact your lender that you explain your intentions with the higher payments. -
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*Bi-weekly payment plan.
Most lenders either offer or will refer you to a company that offers a bi-weekly payment program. These programs electronically take a portion of your mortgage payment out every pay period. The total of these payments usually equal one extra payment a year. Most of these programs do include a sign up or processing fee. They also charge you a fee with each withdrawal from your account. -
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*The easiest way to pay-off your mortgage early.
If you get taxes back at the end of the year, make one extra payment when you get your taxes back. One extra payment a year will pay off a thirty year conventional mortgage in about twenty three years! That will save you seven years of payments.
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Tips & Warnings
Contact your lender and discuss your options for paying extra on your principle balance.
Most bi-weekly payment programs include a sign up or processing fee. Then they also charge you a fee with every transaction. Some programs even have an annual fee. Make sure you research different bi-weekly programs before you sign up.
