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Have you made a lifelong pledge to be with your mortgage until you’re old and gray?
Life doesn’t have to be that way.
If you have a 15-year or 30-year mortgage, you can create a plan to end your relationship sooner and be mortgage-free. Woohoo!
Article first featured on blackdoctor.org.
Oh yeah, you can also profit from real estate so you can pay off your mortgage faster. If you are considering a real estate license, here are some resources for you:
- eBook: How to Pass the Real Estate Exam in Less Than 30 Days
- Real Estate Express Pre-Licensing Course – Use Link for Discount! – Current Promo Code: NYNC35
- Wake Up: Your Home May Not Be an Asset
Are you ready to get started?
Creating additional streams of income will help you pay your mortgage faster. One income stream that does not require you to get another job is investing in dividend stocks. Grab my latest book on Amazon, Dividends Are a Queen’s Best Friend, if you want to learn how to generate an extra stream of income from your investments. As an Amazon Affiliate, I may receive compensation if you click on the product link.
Here are 3 ways to pay off your mortgage faster and get on track to live a life of financial freedom.
1. Pay Your Mortgage Every 2 Weeks
I know this may sound like a bit much but let me explain.
You can make more payments towards your mortgage every month without getting a raise at work or pinching pennies to decrease expenses.
All you have to do is make bi-weekly payments instead of making one payment per month.
Here’s how it works.
Let’s say your mortgage is $2000 a month. You can pay $100 every 2 weeks. This will allow you to make 26 bi-weekly payments throughout the year because you are making payments every 2 weeks and there are 52 weeks in a year. Well, if you make 26 bi-weekly payments, that equates to 13 full payments every year instead of the typical 12 payments a year.
Now, you’ve just slashed some years off your mortgage pay-off date and saved thousands in interest costs. Check with your financial coach (me!) to determine how this works and how you can get started.
2. Apply Bonuses to Your Mortgage Balance
Any unexpected or large sum payment you receive throughout the year can be considered a bonus and can help you decrease your mortgage balance.
Got a raise? Large tax refund? Another stream of income? Use this extra money to increase your net worth!
When you send the bank extra payments towards your mortgage, you decrease your principal loan balance. When you decrease your loan balance, you increase your net worth.
3. Buy a Home that Doesn’t Put a Dent in Your Net Worth
Your net worth equals your assets minus your liabilities.
When you take on a mortgage, you increase your liabilities. Is this a good thing or a bad thing?
Well, it all depends.
Let’s say you have assets of $25,000 (Cash savings + 401K Investments). Then you purchase a home that costs $75,000. Your net worth is -$50K.
Your net worth is now in the negative. Do you have enough liquid assets to cover unexpected homeownership expenses? If not, this new home purchase can put a dent in your net worth.
Do yourself a favor and do a thorough review of your assets, liabilities, income, and expenses (or hire a financial coach) to figure out how much you can comfortably spend on a home to avoid being stuck with an extended mortgage period.
Buying a home below your means will give you a good financial cushion to be able to make extra payments throughout the year.
Are you on a journey to financial freedom? Join the Wealthy Women Daily NetWorthChallenge Facebook Group! We are giving all the secrets to increase your net worth and live your best life!
Are you working to pay off your mortgage faster? Let us know below!
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Thank you so much for this article, so much good info. Not a homeowner yet but trying to learn all I can beforehand!
Yes! It’s good to start early and learn all you can before you dive into the process of homeownership. If you have questions about the process, feel free to reach out to us at hello@ceounlimitedfirm.com.
Great Article
Thanks so much! I’m so glad you enjoyed the article.
I absolutely LOVE the bi-weekly mortgage payments! So smart!
Yes! It’s a great mathematical benefit that allows you to achieve your mortgage goals faster.
Such an informative post. My father owns properties, I’ll suggest him your advices.
That’s so awesome! It’s so important to make sure our daily decisions put us in a better position than we were.