How do you payoff a mortgage early?

Answer 1

The most common answer is to add additional monies to your monthly payment. The more you can add the faster you can pay down the loan. Make sure you include instructions each month to the mortgage company that the additional monies go to principal only. There is another option but you would first need to qualify with your lender if they will accept this type of payment process. Most of them don't now. It works like this, you take your monthly mortgage payment and divide it into 1/2. Then you mail that amount to the lender twice a month. In order for this to work the half payment must be applied to the loan when received. If the lender holds it in pending until the other half is received it defeats the purpose. My parents did this with their mortgage and paid off a 30 year loan in 23 years. They did not pay any additional amount on each 1/2 payment. I have been paying 1/4 payments weekly online to my auto loan and credit card. My auto loan was $21,000 in 6/2006 and is just a little over $13000 now. At this rate I will have paid off a 10 year loan in a little over 7 1/2 years. If I add an additional $5 a week to the payment I will shorten it by about 6 months more. Regarding the credit card ($6500) my monthly payment now is $100 which I am paying $25 a week and will continue to pay at that rate even though the monthly amount due will decrease. I believe it will pay off about the same time as the auto which is in 5 years. Once these are paid off I will continue to make these payments into an interest bearing account so that I can purchase my next vehicle cash. I am also debating on whether to find a mortgage loan that will allow this kind of payment plan and if the benefits outweigh the cost of refinancing at this point. I currently have 25 years left on my mortgage. I wish I had listened to my mom 20 years ago when she first tried to explain this all to me.