Pay Off Your 15 Year Mortgage Early

Paying off your 15-year mortgage is a goal that you need to work towards immediately if you don't want to be stuck in debt or, worse, lose your house. Coming up with a plan is not the hard part--it's just difficult to stick to it. You'll have to make sacrifices in your spending habits and maybe get rid of some items that you own.

Sell Your Home

Selling your home is probably not the tactic that's most appealing to you, but it's a legitimate way to pay off your mortgage early. You may have rushed into taking on a 15 year mortgage, thinking that you got a good deal. You may have since learned that taking on debt to buy your house was not a wise choice, and there's little hope for improving your financial situation until you get rid of it. Selling your home is not the end of the world, and it's a valid option if you want to start over or become debt free. Consider it as a method for paying your mortgage early.

Add to Monthly Mortgage Payment

You can also pay down your mortgage early if you add more money to your mortgage payment each month and direct the company to apply the extra amount to your mortgage balance. It's important to tell the lender to apply it to your mortgage principal balance so that the lender doesn’t apply it to future payments. Having extra money to pay each month can happen consistently only if you create a budget. You have to reduce or eliminate expenses in other spending areas to find extra money each month. Some spending categories that you should consider trimming include these:

  • Groceries
  • Entertainment
  • Heating and cooling
  • Vacation
  • Auto-related expenses

Sticking to a frugal budget takes a lot of self-discipline, but paying off your 15-year mortgage early should be a good motivation.

Biweekly Mortgage Payments

Ask your lender about the option of paying your mortgage on a biweekly basis. The way it works is you split the monthly mortgage payment in half, but the frequency of paying every two weeks benefits you more than paying just once a month. You end up paying an extra mortgage payment each year. You'll accrue less interest because you're making payments more often.

There are a few drawbacks to this method. To begin with, you don't want to be penalized if for some reason you can't keep up with a biweekly mortgage plan, so ask your lender about that. Some lenders may also charge you a fee for processing more frequent payments, which may not benefit you in the long run.

Extra Payment at the End of the Year

Making an extra monthly or biweekly payment on your 15-year mortgage may be too difficult based on your current financial situation. You may find it easier to make one extra payment each year by applying your tax refund or other lump sum payment that you expect to receive during the year. You can still pay off your mortgage early but not as early as with the monthly or biweekly plans.

These are proven methods to pay off your 15-year mortgage early. Avoid getting into more debt to get rid of your mortgage.

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