How To Knock 8yrs Off Your Mortgage

Well hello everyone!!!! Today we're going to be talking about how to pay off your mortgage faster. I'm going to explain the method we use and we learned this from my loan officer friend. Using this method will knock 8 years off your mortgage but you have to do it correctly and it's advised that you start this at the beginning of your mortgage.

We used this method when we first bought our home. Even though we only had our home for a few years, it still helped to reduce the total amount before we sold our home in 2016.

Before we jump into this I want to say that if you have credit card debt or medical bills......Pay That FIRST!!!! While this method will help you in the long run, you still need to get your other debt taken care of before you start this.

Let's get started.......

So for this example, let's say you have an $800 mortgage note. I strongly suggest that you round it up to $900. You would be surprised how much that extra $100 makes. Now if you're saving money on your grocery budget, like we previously talked about, than there should be no reason why you can't put aside the extra for your mortgage.

Here's how to get started.......

We're going to use a biweekly payment plan. What this means is that you're going to make a payment to your mortgage Every Other Week!!!! Now before you freak out......NO we're not paying $900 biweekly. You're actually going to cut that in half and pay $450 biweekly. This totals up to 26 payments a year.

First thing I suggest is to save up 1 extra payment, so in this case it would be an extra $900. The reason why you want to do this is because you need to get one month ahead in order for this to work. So let's say your payment is due on the 1st of the month. Go ahead a make your regular payment. In TWO weeks from that date, make another payment to your mortgage for $900. This will jump your due date one month ahead.

After you make those 2 FULL mortgage payments to get one month ahead, you're going to start making half payments BIWEEKLY!!!! 

Let me show you an example for the month of December:

                    

                    12/01/17   -  $900 to mortgage payment

                    12/15/17   -  $900 to mortgage payment - to get 1 month ahead

                    12/29/17   -  $450 to mortgage payment - half payment

                    01/12/18   -  $450 to mortgage payment - half payment

The only thing extra you need to come up with, is the $900 extra payment. That's it!!!!!! After that you're making the same payment per month but you're making half payments.

I suggest you set up a "Loan Account". This is an account that you can transfer money to weekly to make sure that you're putting back the money for your loan. If you put $225 into your Loan Account weekly, you will insure that you have the money. You're not getting a debt card or check book for this account. It is strictly to pay your loans and that's it!!!!!

Now here's the trick.....you have to do this for the whole life term of your mortgage because if you don't than it won't work. Yes, there are going to be some months when you pay 3 times instead of 2 which is ok. That's honestly what you want to do. You will be making 26 half payments a year.

So why don't we look at the benefits of this and how it works, besides moving your due date up.

              $800 x 12= $9,600 a year if you paid it normally 

           

              $450 x 26= $11,700 a year if you use this method

***** That's a difference of $2,100 extra a year that you're putting towards your mortgage *****

If you did this for the first 10 years.........that's $21,000 EXTRA that you're putting towards your mortgage!!!!!!!

Like I said, you're pretty much paying the same amount, but doing it differently. All you have to do is save 1 extra payment, add $100 extra to your mortgage, and pay half payments biweekly. It's really that simple honestly.

I suggest you give this a shot. What do you have to lose?????

*~ Cassie ~*

@livingtobudget