Early Mortgage Payoff Tips
By Aubrey Nichols

Paying off your mortgage early may seem like a lofty goal, but there are small ways that can help reduce your mortgage. With very little effort, such seemingly minuscule changes could save you literally thousands of dollars in the long run. The following are (relatively) painless ways to begin reducing your principal mortgage, thus paying off the loan much quicker than you ever thought possible.

Pay More than the Minimum

If your mortgage is $1525 every month, round up and pay an even $1600. That extra $75, though it may seem small, will have a huge impact over time.

Pay More than Monthly

See if your lender offers a bi-weekly payment plan, where you make a payment every other week that equals exactly half of your normal payment. Since there are 52 weeks in a year, you will end up making 26 bi-weekly payments for a grand total of 13 full payments each year – one more than the traditional 12 monthly payments. Again, though it may seem small, that one extra monthly payment will really impact your interest rate.

You can also pay weekly; most lenders have an automatic payment option that you can set up to automatically deduct your account and pay your mortgage on the day of your choosing.

Put Extra Funds toward your Mortgage

Have a Christmas bonus from work or a tax refund coming in the mail? Send that extra money that is not accounted for in your budget straight to your mortgage. It is essentially “free” (a term which I use very loosely) money that you were not counting on to pay the bills; thus you can apply it towards your mortgage without affecting your finances while working to reduce your interest rate.

Keep Loose Change!

Throw all your lose change into a large jar and use it towards your mortgage each month. It may seem like it is more effort than it is worth but you will be surprised by how quickly all those pennies, nickels, and dimes add up. Case in point: my husband and I did this for exactly six months and were very pleasantly surprised to find all our collected change was nearly $400, money we would have otherwise disregarded.

Early Mortgage Payoff Plans

Let’s face it: most of us are not fiscally responsible or disciplined enough to put all our extra money towards our mortgage every time we have some. Thankfully, there is a solution for that. Early mortgage payoff systems, such as the Money Merge Account, help homeowners pay off their mortgage early by using a software system. Most programs require an initial investment, but one that is well worth it since it will save so much in interest down the road.

Avoid Late Fees!

Pay your mortgage on time – it’s as simple as that! Late fees are often very costly. For instance, a 5% penalty fee on a $1,500 payment would be $75 (many companies have a much higher penalty percent). Scheduling automatic payments is a great way to avoid paying late fees; inquire if your lender offers online payment. If you do not have online payment and run the risk of paying your mortgage late, send the payment via overnight express mail. Such mail services typically cost around $15, which is much less than the penalty fee that will be incurred if you do not get the payment in on time.

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