This may seem crazy coming from a mortgage guy, but I’m super excited about my newest goal: paying off my mortgage.
While there’s no doubt that a mortgage is great for purchasing a home or consolidating debts, I also know it is not something I want as a permanent fixture in my life.You can dramatically cut years off the length of your loan by paying extra toward the principal on it. I have extra money deducted automatically to avoid making a monthly decision about it. I see it as a “forced savings plan.” Plus, it gives me a sense of liberation to know I am not on an eternal rat wheel.
I encourage you to grab a pen and paper, draft a budget, pay off all consumer debt, and then devise a plan to pay off your home in 15 years or less. It does not require as much as you might think to do this. Below is a scenario where by paying an additional $300 a month on a $100,000 mortgage loan, a homeowner could shave 16 years off the life of his or her mortgage, ultimately saving more than $44,000.
|Loan Amount||Interest Rate||Monthly Mortgage Payment||Extra Payment||Total Monthly Payment||Years to Pay Off Loan||Total Paid||Total Saved|
*The following example does not include taxes and insurance. It is based strictly off the loan amount.