Have you always wanted a debt-free lifestyle? Does your mortgage loan seem too big to handle? Let me tell you right now, it’s not! Paying it down can happen very quickly as long as you are disciplined and consistent.
Don’t Throw Money With a Blindfold On
Before you do anything, please please please come up with a plan first! If you start out by throwing an extra $200 at your house loan, and you have no long-term payment plan, you’ll probably never pay extra again!
Why not? First of all, that one time payment of $200 won’t even put a dent in your mortgage, which will make it completely unsatisfying; and secondly, without a plan, you have no idea how that extra payment affects your overall pay-off time-frame. Did it cut out an entire payment? Part of a payment? Multiple payments? You have no clue, and you’ll quit because you won’t understand the results of your actions.
Know Your Current Situation
What are the terms of your current loan? Do you have a 30 year mortgage? Or, better yet, do you have a 15 year mortgage? How many years have you been making payments toward this loan? You’ll need to know the answers to these questions before you can figure out how quickly you can pay off the loan.
Decide How Quickly to Pay Off the Mortgage
My wife and I have decided to pay off our mortgage in less than 4 years, and in order to do that, we needed to know how much extra to put toward the mortgage payment each month! To do this, find a mortgage interest calculator online and punch in the remaining balance on your mortgage, the number of years you’d like to pay it off, and your current interest rate (if you own an investment property, perhaps you’d like to review a buy to let mortgage calculator). Voila! The calculator will spit out a rough estimate of what you will need to pay each month to accomplish your debt-free goal!
How to Find That Extra Money
Your main question might be, “Yes, I know when I’d like to pay down the mortgage, but where am I supposed to find the extra money?” My wife and I asked ourselves a similar question about a year ago, and we came up with a solution. I started making money online, and she started a photography business (in addition to our full-time jobs). Between the two of us, we are on track to earn an extra $40,000 in 2012! That mortgage is going to be history in no-time!
If you’d like ideas on how to make more money, make sure to download my free eBook, “101 Ways to Make More Money” (you can get this with your free subscription to the site). You’d be surprised how many options there are to make an additional income outside of your day-job.
The other option, of course, is to reduce your expenses. You could find some extra money by cutting your cable, reducing your energy bills, or by getting creative in other ways!
The Hardest Part is Consistency
Whatever you decide, just be sure to stay consistent with your goal! If you are consistently putting that $200 toward your mortgage each month, you now know that it will result in paying off the house loan by20XX (you fill in your date here). If you still with it, you could be completely debt-free and living the good life before you know it!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.