Would you like to Pay off Your 30 Year Mortgage in Less than 30 Years?

Would you like to Pay off Your 30 Year Mortgage in LESS than 30 Years?

I would!!! I would!!! I would!!! Both of my hands are in the air! (Feet too).

Do you remember when you closed on your house? Do you remember when your closer showed you the Amortization Schedule? It showed you that for the first 15 years, more than 50% of your monthly payment pays more interest than principal... sigh... And we accepted it because that is what happens when you buy a house~ Right.?.?.? Wrong!!! We were wrong! We do have options!

There ARE options to help us pay our mortgage down faster!!! 

Option 1

One extra principal payment each year - This one is easy. Make one extra payment each year and direct you lender to apply the extra payment to principal. This can be done in one lump sum or a little extra when you have it. If you do this, you will pay off that 30 year mortgage 5-6 years faster! And save yourself a lot of interest!

Options 2 is from an article found on Forbes.com. Way to think outside the box Forbes.com. Please note that this option will not work for everyone, but it will work for some!

Mortgage Rate Arbitrage - Take out a HELOC (Home Equity Line of Credit). Use the money to pay down the principal of your mortgage. You will still be paying interest, but it will be simple interest and not amortized interest. Compare the two for you and  your situation. Make sure that you are still positively cash flowing in your budget as you still have to make both payments. 

Forbes.com offers some 'key considerations' and some tips on when you should 'avoid' using this strategy. Check out the Full Forbes.com Article Here!