Here are five mortgage hacks to pay off your mortgage early and save hundreds of thousands of dollars:
One is to make one extra loan payment each year. The loan payment and structure impacts how much earlier the loan can be paid off, but in many cases, the loan can be paid off approximately six years ahead of schedule saving hundreds of thousands of dollars.
The second is making two payments per month instead of one. By splitting your monthly mortgage payment into two payments per month you can shorten your 30 year loan to be paid off in 24 years.
Third is rounding up the payment. For example, if a homeowner rounds up their monthly mortgage payment of $3,160 to $3,200 every month, the duration of the loan will decrease approximately 2 years.
A fourth is the dollar-a-month plan. Each month increase the payment by $1; $900 the first month, $901 the second month and so on. This could reduce the term of the mortgage by 8 years.
Fifth use “surprise money” or bonuses to make extra payments; use this unexpected money to help pay down the loan. This is the easiest way to pay off a mortgage more quickly. More than likely this money is not accounted for in your monthly or yearly budget, so it’s easier to use in this scenario.
One of my favorite “house hacking” routes is to purchase a multi-family property and live in one of the units while renting out the rest. The tenants monthly rent will contribute toward your monthly loan payment and maintenance costs.
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