If your personal budget is similar to many other people’s budgets, your home mortgage payment is by
far the largest expense that you pay
for each month. In fact, this payment may easily account for 20 or 25
percent or more of your take-home income. Understandably, you may be
focused on trying to pay this expense off early. By focusing on this
payment, you can build equity and may be able to achieve financial
security more quickly. You simply have to find a way to put aside a bit
of extra cash regularly so that you can make extra payments, and there
are few easy ways that you can consider.
Use Your Tax Refund
First, if you are one of the many taxpayers who receives a refund
each year, consider setting aside some or all of this refund to reduce
your outstanding mortgage balance. Some taxpayers may have such a
sizable refund that it can account for two or more mortgage payments
each year. However, even a few hundred dollars extra put toward your
principal balance will save you a considerable amount of money in
interest charges over time and will have a wonderful effect on your
Earmark Your Annual Bonus
If you are lucky enough to receive an annual bonus each year, you may
consider using this to pay down your principal balance. While you may
usually spend this money on extra holiday gifts or just add it to your
spending cash, you can benefit more substantially when you contribute it
to your effort to pay down your mortgage.
Use An Automated Draft To Create a Fund
Another great idea that will work well for all individuals is to
create an automated draft from your checking account each month. You may
set aside the funds in a special account, and you can make an extra
mortgage payment from this account periodically. Another idea is to set
up auto payments for your mortgage that are higher than the amount due.
For example, you may establish auto payments that are $50 or $100 more
than your scheduled payments.
Paying off your mortgage earlier can be a life changing event for
you. Simply imagine how different your life would be if you were not
responsible for this payment each month. The fact is that this could be
your reality sooner than you think if you follow these tips. For the
best results, apply two or even all three tips to your efforts.