Purchasing property is one of the best methods to achieve financial freedom. When it comes to residential real estate, everyone needs a place to live. The financial freedom part comes in when you no longer have debt associated with your home. To help you achieve that financial freedom faster, here is a scalable method to paying off your mortgage in half the time:
Take your principle (without interest and escrows = taxes & insurance), divide it by 12, and add that extra amount to your monthly payment. By paying that extra amount each month towards your principal (you must specify whether you’re paying online or snail mail), you’ll cut your 30-year mortgage by 7-8 years. Do it twice and you’ll cut the life of your mortgage in half!
Example:
- Principle: $900/12 = $75. Pay $975 each month instead of $900 and you’ll cut 7-8 years off the life of the loan.
- Double that extra ($75 x 2 = $150), add that to your payment ($900 + $150 = $1,050), and you will cut the life of your loan in half!