Wouldn’t it be nice to get rid of that mortgage?

Are you also a slave to your mortgage and you feel it as a life sentence? Do you think you have done something terribly wrong in this life and your punishment is to carry this penitence until you die? I hear you, I feel you; today I propose a strategy to limit this huge and long expense, quite possibly the biggest you will do in your life. It will take you 15, 20, 30 years, or more, to pay it off. I believe it is worth trying any effort to reduce that monthly payment, the total cost and the duration of this burden.

Break free from slavery to the mortgage

          Which one came with your house?

Some ideas

-The first thing you can do is check if you can make additional payments (unlimited are ideal, this is very important), as many as you want and as much as you want, without any penalty or extra cost. If the financial institution or bank that holds your mortgage does not allow it, try to refinance the debt by making sure they let you do these extra payments or move to another institution that allows it. Do not be afraid, it is also a good time to lower interest rates. Do not forget to try to lower the loan term, fewer years translates into lower total cost.


Let’s get some easy figures (this one it’s easy)

-Then round up your monthly payment automatically to the next hundred. That is, if you pay $1,112.98 (this is the average monthly mortgage payment in the US, for a loan of $251,040 30-year term and with an interest rate of 3.912%), round up to $1,200, practically you will not notice it. If you could, even round it up to the following hundred to $1,300, maybe a little later when you start controlling your spending, it does not have to happen overnight.


Scenario A

-With just an extra monthly payment of $87.02, up to $1,200

You will reduce your loan 3 years and 7 months and you will save in interest $24,105.96 in the life of the loan (Not bad, right? YOU CAN GET THE BEST HOLIDAYS EVER WITH THOSE SAVINGS. WAIT, THERE IS MORE, WE HAVE JUST STARTED)

     Is this how you feel with your mortgage?

Scenario B

-With an extra monthly payment of $187.02, up to $1,300

You will reduce your loan 6 years and 9 months and you will save $44,453.62 in interest in the life of the loan (THIS ALONE LETS YOU SAVE ONE FULL YEAR OF SALARY, median in the USA)


-Each year, the IRS gives you back an amount of money that is often spent. Try to make an extra payment each year entering the tax refund directly into the mortgage debt to reduce it. $3,120 was the average amount in tax returns for 2015.


Scenario C

-With an extra annual payment of $3,120, you get in your tax refund

You will reduce your loan 8 years and 10 months and you will save $57,912.98, in interest in the life of the loan (WE ARE GETTING SERIOUS HERE: SALARY + HOLIDAYS)


-Each year your salary rises, the average rise last year was 2.9% and the median salary was $44,600. That means a gross increase of $1,293.40, to simplify things, let’s say that this translates to $100 extra each month. You can add those $100 to your monthly payment and cut even some more debt.

                        Nobody likes this

Scenario D

-With an extra monthly payment of $287.02 up to $1400 (ONLY THE FIRST YEAR CONSIDERING SALARY INCREASE)

You will reduce your loan 9 years and 2 months and you will save $59,817.29 in interest on the total credit life (WE ARE NOT TAKING INTO ACCOUNT FURTHER ANNUAL INCREMENTS TO YOUR SALARY)



-Each small amount adds up, especially if you do it automatically so you will not realize and it will represent a big step to claim your FREEDOM.

-Be patient and keep pounding those rises and extra payments towards your debt, gradually you will see how you start mastering your mortgage.

-If you are disciplined and you combine all the different strategies I presented:


-This is just the start, every time you cut some spending you can include it in your mortgage payment to further lower the debt and the duration of the loan.


So . . . start thinking about what will you do with the $1,112.98 EXTRA EACH MONTH that you will pocket when you finish paying the mortgage.


Life sentence is reduced. . . YES, YOU CAN!


I used this free online calculator, there are more, but this is quite clear, enter your numbers and start dreaming, always with your feet on the ground!





Do you know any other strategies to reduce your MORTGAGE?

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