Six ways to pay off your mortgage sooner

1. Pay more than required each month.

     The best way to pay your mortgage off sooner is to pay a little bit more than you are supposed to each month. You can pay anywhere from $10 more to $1,000 more. It doesn't matter, just as long as you pay a little extra it will add up in the end. You shouldn't have to sacrifice necessities, but putting more towards your mortgage is a good habit. You'll be freeing up money down the road, which you'll be glad you have done.

2. Make extra payments.

     Making an additional payment per month is a bit more difficult than paying a little extra per month, even though it has the same benefit. The less debt you have, the more cash flow you have, which equals the more things you can do. One way to make extra payments is to make payments every two weeks instead of once a month. Given the math here that is 26 half-payments instead of 12 full-payments. This has the possibility to eliminate six years off a 30 year mortgage, as long as you also pay a little extra too.

3. Pay a lump sum

     As long as you don't have other debt, it's best to pay that little extra with (if you're lucky enough to receive) a money gift, an inheritance, a tax refund, or a bonus. These will give you a little extra money to go towards getting your debt paid of as soon as possible.

4. Refinance to speed up payoff.

     The idea behind refinancing is that a lower payment will free up some money you can pay towards the principal amount. The difficult part is qualifying for a new loan. The toughest challenge is declining home values. With a lower valuation, your loan-to- value ratio will be skewed, which you may have to get insurance for your loan. You will also need a strong credit score and proof of income from the previous two years. Lastly, shorten the term of the loan.

5. Shrink your housing costs.

     If you really want to lose the debt, selling your house and buying a more affordable one is the most effective way to do so. It's your personal choice to downsize, but it is definitely worth considering. But beware, don't think you'll beat the system by selling high and buying low. You shoud probably leave that to professional real-estate investors.

6. Tap retirement savings.

     Tapping into your retirement savings should be your last ditch effort to avoid forclosure. Most Americans don't have a large retirement account anyway, so don't bother reaching towards it unless you absolutly have to.


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