Get That Mortgage off Your Back: 10 Ways to Speed up the Mortgage Payoff Process

Imagine making 37% more money every month. Now stop imagining, because it’s not a fanciful dream. It’s the real, achievable outcome of paying off your mortgage.

That’s right: The average American spends almost 40% of their income on housing alone. And that’s why paying off your mortgage early is easily one of the best financial strategies of the decade. But as a modern-day mom, you know there’s barely room in the family budget to handle mortgage payments as-is.

Want to speed up the mortgage payoff process? Own your home with the help of these ten simple lifestyle and loan adjustments.

1. Know Your Budget

If you haven’t yet bought a house, then you’re in the best position to situate your future mortgage. Don’t want to spend 30 years paying off your home? Then don’t take on a mortgage you can’t afford.

Working with an experienced real estate agent is one way to avoid a financial blunder. However, it’s also a good idea to personally verify your mortgage situation before hunting for a new home.

A good rule of thumb is that you’re able to make at least a 10% downpayment and that the mortgage should cost no more than 30% of your takehome pay.

2. Schedule an Extra Payment

The simple fact about the mortgage payoff process is the more you pay, the less you’ll owe. Squeezing in one additional payment every year can lead to some big results, especially if it all goes towards the principal.

But another mortgage payment is not a small expense. Try to squeeze it in during a lucrative month.

For example, biweekly employees occasionally snag three paychecks in one month. That could go towards the mortgage without breaking the budget.

3. Try Refinancing

Many home loans come with a 30-year mortgage. That’s plenty of time for the market — and your credit score — to change. Odds are you didn’t get your hands on the best interest rate when you bought the home in your mid-20s.

But times have changed. Leverage your improved credit situation by refinancing into a low-interest loan. This option can have something of a snowball effect.

With an improved interest rate, you’ll pay less overall. This will also reduce your monthly mortgage payment, allowing you to put the difference towards the principal loan.

4. Pay Biweekly

Most mortgages call for monthly payments. But one of the best mortgage hacks is to negotiate a biweekly payback schedule.

In theory, you’re still paying the same amount every month. It’s just spread across two payments every month, rather than one. But remember how we talked about taking advantage of an extra paycheck?

The same method applies here. Occasionally, three mortgage payments will land on a single month. Over a span of a year, you’ll end up putting a little extra towards the mortgage than you would with traditional monthly payments.

5. Downsize Your Mortgage — And Your Home

Everyone wants to be debt-free. But if the dream seems unattainable with your current mortgage loan, it may be time to reconsider your living situation. How about taking on a smaller property?

Yes, I’m talking about downsizing. The equity earned in your current home can help you pay off a smaller one in less time. Not to mention, a smaller home comes with a smaller mortgage (in most cases).

It’s not the perfect solution since you’ll lose out to real estate expenses, but it’s better than staying indebted for a full 30 years.

Thinking of heading down this path, but need a boost of confidence? Read this guide about selling a house with a mortgage so you know what to expect.

6. Rent the Property

When you need more expendable income to put towards the mortgage, then put your home to work for you. You stand to benefit hundreds of dollars every month by converting a portion of unused space into a living area for a renter.

This is an especially great option for those who took on a bit more than they could chew but aren’t looking to downsize. Just remember, however, that renting laws vary from place to place. And in most situations, the money earned from renting your home is completely taxable.

7. Take on a Flexible Mortgage

What is a flexible mortgage? It comes with great benefits such as the ability to underpay, overpay, or even enjoy relief from mortgage payments entirely. But we’re trying to pay off mortgage early and not kick the can down the road.

The best part about a flexible mortgage is setting your own terms. Imagine a 15-year mortgage instead of 30.

Note that your mortgage payments will increase substantially. However, mortgages with shorter terms also come with shorter interest rates. When you have the money to put towards the mortgage, this is the most efficient method to pay it off early.

8. Put More Money Down

Tt’s oftentimes better to put off buying your home, even if you earn more income down the line. Why? Because you’ll have more time to save.

Bigger down payments mean smaller loans and thus less interest. Try to aim for 30% or more. As we’ve mentioned earlier: The less you have to put towards the mortgage payment, the more that goes towards the principal itself.

9. Avoid Unnecessary Expenses

Small changes often bring big savings. Tally up the money you spend on nonessentials, like Chinese takeout or your morning cup of coffee. If you’re the average American, you’re looking at hundreds of dollars that could be better spent elsewhere.

Do you need to live like a hermit for the next 20 years to pay off the mortgage? No. But you can trim down your expendable income and divert the difference towards those extra payments we’ve been talking about.

10. Make Use of Your Windfalls

Whether an inheritance, tax refund, or a big bonus, some homeowners are lucky enough to score a windfall from time to time. It’s tempting to use this money on large expenses. But before you book that Disney World vacation, put a chunk of it towards the principal loan.

Think of it as investing in a sure-thing savings bond. The principal you pay off no longer gains interest. In the long run, this can save you thousands of dollars — or even tens of thousands, depending on when you pay.

Hasten the Mortgage Payoff Process

The mortgage term is a suggestion, and it’s time to start treating it like one. You can trim a 30-year mortgage down to 20, or even 15 if you start making wise investments early on.

Take control of the mortgage payoff process with some minor adjustments. In less than a decade, you can start saving thousands every month with mortgage-free living.

As a mom, you’re always looking to improve the family finances. Search our site for more ways to stretch every dollar.