- 1). Call your lender to ask if you have a prepayment penalty on your loan. If so, the lender may charge you expensive additional fees if you try to pay off the loan before it's due. Evaluate whether the amount of these fees is worth your goal of owning the home without a mortgage more quickly than originally planned --- it is your personal decision.
- 2). Determine how much you have free at the end of each month after all of your bills are paid. If you receive a bonus at the end of each year, determine how much of it you can realistically dedicate to paying off your mortgage note more aggressively.
- 3). Analyze your current list of bills and expenses to cut down on the extras. For instance, you might be able to switch cell phone plans to a more affordable option. You can always return to those extras after you have paid off the mortgage note.
- 4). Send the extra amounts you've freed up to your lender each month (or once at the end of the year in case of a bonus) along with your usual payment amount. Write a note with your payment that clearly states that this extra payment is to lower the loan principal. The more principal you pay each month or year, the more you lower your time to pay off the mortgage.
- 5). Enter your loan terms and information about the extra principal you have decided to pay each month or year into the Bankrate mortgage calculator. This calculator shows you by how many years you will lower your mortgage term by taking this action.
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