How to Pay Off a Mortgage in Less Than 30 Years

The average home buyer doesn't have enough money saved to pay cash for their house. Thus, they have to apply for a mortgage and spend the next 30 years paying off the balance. Although the typical home mortgage term is 30 years, there are ways to reduce this balance quicker and own your home outright. Paying off a mortgage in less than 30 years often calls for careful planning and smart money management.

Instructions

1. Decrease your mortgage term. Opt for a shorter mortgage term when applying for a home loan--perhaps 15 or 20 years. Or, refinance your home loan and choose a shorter term to pay off the mortgage in less than 30 years. Higher monthly payments are associated with decreased mortgage terms.

2. Pay your home loan twice a month. Bi-weekly mortgage payments can knock approximately six years off your home loan term. Send your lender one half of the mortgage payment every two weeks.

3. Add extra money to your payments. Evaluate your finances to see if you can make higher payments. It doesn't have to be a lot of money. Aim for an extra $50 to $100 a month to pay off your mortgage loan faster.

4. Apply a lump sum of money towards your principal. Use a portion (or all) of the extra money you receive from a tax refund, settlement or severance to pay down your principal balance and reduce your mortgage term.

References

• Suburban Dollar: Pay Your Mortgage Off Early
• ChristianPF: How to Pay off Your Mortgage Sooner