How to Pay Off a Home Mortgage in Less than 30 Years
- 1). Pay less interest with bi-weekly payments. Talk with your home loan lender to see if you can setup a bi-weekly payment schedule and make a home loan payment every two weeks. This method will reduce the amount you owe in interest payments and result in one extra payment a year. According to the Mortgage Professor, bi-weekly payments can reduce mortgage terms by seven years.
- 2). Review your personal budget to see if you can afford a decreased loan term. Pay off your home mortgage in less than 30 years by opting for a 15- or 20-year mortgage term. A reduced mortgage will cause mortgage payments to increase, but it's the fastest way to build equity, and you'll save money on interest payments.
- 3). Add extra money towards your principal each month. Mortgage lenders give the option of adding extra money to a home loan payment in order to reduce the principal only. Take your disposable income and make a principal-only payment each month. Either write a separate check and indicate "principal only" in the memo section, or schedule a principal-only payment using the lender's online payment system.
- 4). Make an extra payment each year. Rather than spending money received from an employment bonus or tax return, use this income to make a lump-sum principal-only payment or an extra mortgage payment at least once a year.
