- Find out find the lender if there is a penalty to prepay the mortgage early. If yes, save the additional payments you can afford in a separate bank account until the penalty expires. Then pay the full amount to principal only. This will reduce the number of years, as well as a large interest.
- Ask the lender to allow you to make bi-weekly payments on the mortgage instead of once per month. This method pays 13 payments per year (52 week (year) divided by 4 weeks (per month). This automatically knocks 7 years of the mortgage.
- Working together, you can collect an additional affordable monthly payment, aside from the contracted – monthly escrow (principal + interest + tax and insurance).
- As discussed, you need to pay the extra payments each month, but pay it through the lenders website. That way the computer will apply the funds the same day it is paid. With the extra money paid, the taxes have to be recalculated.
- Use a simple prepayment calculator, that will tell you how many years and interest will be knocked off the mortgage.
- If you can pay off the mortgage in 5 to 7 years, it doesn’t matter how long a mortgage-term you originally have with the lender.
