A mortgage is oftentimes the biggest debt that a person faces in life, with the largest part of the mortgage due to the interest that is on the mortgage. Every homeowner would gladly be rid of the mortgage interest, but since that is how lending institutions make their money, it’s a necessary evil. If given the opportunity, homeowners would love the opportunity to reduce the amount of interest paid, with the key to reducing mortgage debt lying in reducing the amount of interest that they pay on their mortgage. By paying off a mortgage before the life of the loan has expired no matter if we are talking months or even years in advance, all of the interest that they would have had to pay during that time will not have to be paid. Also, the interest that will be paid off early will be at a reduced rate because they are reducing the total amount that the interest is applied to at a much faster rate. Now the trick that comes into play is finding out a way to pay off the mortgage early. For the typical homebuyer who is on a tight household budget, the mere idea of paying off a loan early is a joke. No need to laugh about it though, and as humorous as it may seem to be on a tight budget and at the same time paying off a mortgage loan earlier, it can be done. Yes, you can pay down on a mortgage loan in order to pay it off early without having to cause a strain financially and there are services which can assist a homeowner with a mortgage loan to help them find avenues in which to pay off their mortgage at a faster rate. Here are just a few examples of how a mortgage can be paid off early.
One simple way to pay off a mortgage early is by putting a portion of a mortgage payment aside automatically from each paycheck into an interest baring savings account. In doing so, the money is out of sight and out of mind, no need to worry about how it’s going to be done, because if you don’t even see it then you won’t be tempted to spend it. If one sets aside approximately half of their mortgage payment every other week, it will end up in a savings that is equivalent to an extra payment every year. Setting aside slightly more than half will cause an even greater savings, causing the mortgage loan to be paid off at an even a faster rate. Depending upon the length of your mortgage term and when a savings plan was implemented, months or even years will literally be peeled off of your mortgage loan. All that has to be done is to pay whatever is put aside each time a mortgage comes due which in all actuality will cause a homeowner to end up with a few payments that are significantly more than the minimum monthly mortgage payment.
Don’t like the idea of having to track how much is being saved over the course of a year? Then one may want to use income tax returns to help you make up the difference. For many people, the amount that they receive in their tax returns is significantly more than their mortgage payment. While many count on monies received back from the United State Government on their taxes to pay off other debts, or to make purchases, it is better to use at least part of that money especially if the money that is to be received back is quite significant. By using part of your tax return money to pay down a mortgage loan, it can be the equivalent of an extra mortgage payment once per year which can significantly reduce how much one owes. If you can afford to contribute more than just the amount of one payment or if you use this in conjunction with the savings plan mentioned above you can pay off your mortgage even faster. Now how great would that be?
Now back to the interest baring savings account. If you have a high-interest savings account, you can use that interest to help you pay off your mortgage ahead of time. Once or twice per year, pull out money from your savings that’s equivalent to part of the interest that you’ve accrued and add it in with your mortgage payment. Provided that you have a high enough savings balance you should be able to make a significant impact on your mortgage debt by doing this. Over the course of the year the amount that you add to your mortgage payments could potentially equal an entire extra payment or more. Should you worry that you can’t keep yourself motivated to keep making these extra payments, you might consider using a bi-weekly mortgage service. These services automatically withdraw one half of your mortgage payment from your checking account every two weeks, and then make your payment for you when it comes due. The system works similar to the paycheck savings plan mentioned above, but since you have an outside company doing the work for you all that you have to do is make sure that you have the money in your account to cover the withdrawals. Though the services do charge fees to cover their costs, the amount that you save in interest payments will be significantly more than what you pay to the service – some lenders even provide these types of flexible payment plans at no extra charge, check with your lender for options.
Keith Munsell 
