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4 Simple Ways to Pay Your Mortgage Off Early

By Richard Rice
As housing prices have tumbled in virtually every major market across the country, the term “your home is your greatest financial asset” has not held true. I would like to share with you 4 simple ways to pay your mortgage off early so that you can avoid any future economic downturn.generally, and loan modifications, specifically.(continued below)

4 Simple Ways to Pay Your Mortgage Off Early

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1. Pay an additional amount on your mortgage
I know this sounds pretty obvious but, if you were able to add a relatively modest amount to your monthly mortgage payment you can potentially take a number of years off of your mortgage. Foe example, if you were able to put an additional $100 a month on a mortgage of $150,000 you will take off almost 8 years off the loan. That is nearly $100,000 that you would not be paying the bank!

2. Pay your mortgage twice a month
Soon after you sign your closing documents at the escrow office, I imagine that you probably received a lot of mail from various companies that offered enrollment in a program where they would pay your mortgage for you on a bi-weekly basis. All that it would require from you is a service fee which can range from several hundred to several thousand dollars during the life of the loan. This is something that you can do on your own and would especially make sense for those who are paid bi-weekly and can budget accordingly. This will essentially pay the loan off sooner because you are paying less interest due to making 2 payments versus 1. In addition to this you would actually be making 1 extra mortgage payment per year.

3. Make your payment before the end of the month
Virtually all mortgage loans are due on the first of the month. What a lot of people don’t realize is that you are not paying for the month in which you make the payment. You are actually making the mortgage payment for the previous month. In other words, your August payment is actually for July. If you have the ability and the discipline to make your mortgage payment early before the end of the previous month, you can save a ton of interest. The key to this is that you need to make sure that the payment is applied before the last day of that month.

4. Pay a large amount towards principal annually
If you are in a job where you receive an annual bonus or receive a substantial amount back on income taxes, putting that towards your mortgage can reduce the years substantially. For example, using the same $150,000 mortgage as mentioned above, every $5,000 will take approximately 2 years off your mortgage. Using this method will turn a 30-year mortgage into a 10-year mortgage.

With a little bit of discipline; organization; and utilizing one or more of the 4 simple ways to pay off your home early, you can enjoy a home that you truly own. It is only then that your home is your greatest financial asset.

Having been in mortgage lending for a number of years I would like to make consumers aware of these simple steps to pay your mortgage off early. Don’t give the banks more of your hard earned money!

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