What your mortgage company doesn’t tell you. Save thousands of dollars. You can pay off your mortgage in half the time without doubling your payments. Build equity faster.

Here’s your step by step instructions on how to pay off your mortgage in half the time or even quicker!

1. First you must find out from your lender if your loan is pre-payable. Most are. Ask if your loan has a pre-payment penalty, pre-payment privilege, or a minimum additional principal payment requirement. Also request an amortization schedule from them.

2. You need to understand the different elements of your monthly payment. PITI stands for principal, interest, taxes and insurance. Many mortgages require an escrow account for the purpose of paying taxes and insurance when due. This account is separate from your actual loan but is paid monthly as part of your payment. Principal (amount of debt), and interest (money charged for the use of money) are the 2 elements we will work with under this system.

3. In the beginning of the term of the mortgage loan the interest paid is much higher than the principal. Let’s take an example of a loan of $100,000 at 6% interest for 30 years(360 months). Your payment is $600/mo. The first payment has a principal of $100 and the interest is $500. If you simply make an extra month of principal payment of $100, you will save $500 in interest and reduce the term of the loan by 2 months not 1 and you don’t have to stop there. Keep track of the next month’s principal on your amortization schedule it increases slightly with each payment. At month 222 is when the principal and interest are equal $300 each. That is why it is so important to pre pay at the start of your loan.

Build Equity Faster. Prepay your mortgage every month! For more info and calculate your payments click here.