Owning your home free and clear is a large life goal for most of us and represents a satisfying accomplishment once done. Before we talk about strategies you can use to make this happen, let’s make sure this is the most prudent use of your money. If you have other consumer credit debt (credit cards, personal lines of credit, etc.), those interest rates are likely higher than the rate on your mortgage loan. You may want to pay off higher-interest installment loans or revolving account balances before you start chipping away at your less costly mortgage debt. Once this debt is paid off, you can start paying your mortgage balance down faster.

Here Are a Couple of Things to Consider:

• Make sure your lender accepts additional payments to the principle balance when you want to make them. Few lenders have limitations or pre-payment penalties, but it’s worth looking into.
• Pay attention to the instructions – it is likely that your lender will require that you designate any additional amount paid as being applied to the principle balance.
• Avoid paying a fee to a third-party – you should be able to manage your pay-off strategy on your own.

How to Get it Done:

Bi-weekly mortgage payment – some lenders will allow you to pay half of your monthly mortgage payment every two weeks. By doing this you are actually making 26 half payments (in other words, 13 full payments) every year. That one additional payment per year can potentially knock 7 or 8 years off of a 30-year mortgage.

Set aside funds to make an additional payment every quarter – this requires personal discipline, but if you use technology to automate the savings it might make it easier for you.

Leverage your bi-weekly pay frequency – if you are paid bi-weekly rather than twice monthly, take advantage of those two months in the year when you are paid three times per month to pay an additional amount.

Refinance to a shorter term – take advantage of low-rate markets to take a new loan with a shorter term.

Refinance and keep making the current payment – take advantage of lower rates but continue to pay the larger payment.

However you decide to approach an early mortgage payoff, it’s a good idea to review your plan with your financial planner. Once you pick your plan, automate it if there is a way to do so. You’ll soon be on your way to owning your home debt-free!