Choose a shorter payback period.
If you can afford higher payments, consider a 15-year fixed mortgage. You will pay off your home within a shorter timeframe and save 15 years worth of interest payments.
Round up.
The more you pay toward your principal, the fewer payments you’ll have to make in the end. For example, if the payment is $975 a month, make a payment of $1,000 and apply the extra $25 toward the principal. It may not seem like much, but it all adds up overtime.
Make biweekly payments.
By paying half of your mortgage payment every other week, you’ll make one whole extra month’s payment by the end of the year. Call your lending institution to see if this is a service they offer.
Make an annual lump sum payment.
Whenever you receive a windfall– your tax return, an annual bonus, an inheritance, etc. — apply it toward the principal of your loan.
Double the principal each quarter.
Four times a year, double the principal amount and add it to your total payment. For example, if the principal comprises $500 of your total payment, add an extra $500 to the principal of your regular payment. |
