Tips for Paying Off Your Mortgage Faster

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You can pay extra money toward your mortgage balance each month or make a larger, lump sum payment on your principal each year. Extra money can also be added to the principal payment from bonuses, gifts, savings and extra earnings. Just remember to make a note on the check for the money to go towards the principal! Make one extra mortgage payment per year. One of the easiest ways to make an extra payment each year is to pay half your mortgage payment every other week instead of paying the full amount once a month, otherwise known as "Bi-weekly payments." With these payments, an extra payment is made so that the total number of payments that one makes adds up to 13 payments in a year rather than the 12 that would have been made with monthly payments. You also want to make sure that if your lender accepts this kind of payment they will not charge you a prepayment penalty. Have you inherited money, earned a bonus or commission, or sold a large item? You could apply that amount to your mortgage's principal balance. This will happen twice a year, adding an extra principal payment to your mortgage loan.