Most people dream about being mortgage free early in their lives, yet too many people veer off course and never take the right steps to make this happen. Can you imagine how much less stressed you would be if you had NO mortgage? It would be like sticking it to the MAN in some small way. No, you probably cannot quit your job and retire. But, if you do lose your job or want to switch careers down the road, being mortgage free can make either of those situations easier to deal with. When you can finally utter the words, "I am mortgage free", you will feel as if a million pounds have been lifted off of your shoulders. One of the keys to your financial life is to get your monthly fixed costs down to as low as possible, and eliminating your mortgage is a huge step in that direction.
So, how can you get there?
1. When you are younger, make a diligent effort to avoid wasting money on things that neither you nor your young kids need. Expensive toys will be enjoyed by your kids for about 5 days, and then they will move on to something else. Why buy that big screen TV if you can make your mortgage go away a lot faster, or at least shop around and buy an inexpensive one (like Vizio). And, don't take costly trips when the same theory applies to your kids; they won't remember the experiences and you could use those funds to payoff the mortgage early.
2. It is imperative that your first track all of your monthly expenses and then lay down a budget and follow it. The budget needs to include how much money you plan to pay towards your mortgage principal each month.
3. Refinance when you see the rates drop; this can potentially reduce your interest payments and allow you to take that extra money and make extra principal payments against your mortgage. Today, 30 year interest rates are around 4%, so if you are in the 5-6% range or higher, it is imperative that you refinance.
4. When you receive a windfall, you need to immediately use those funds to contribute to paying off your mortgage. Make an extra principal payment. Don't go out on a shopping spree; make a decision to see teh future without a mortgage. Any extra cash, including a second job's income, a bonus, a raise, money you inherit, etc. needs to help towards paying off your mortgage.
5. Retirement is important, and your should plan for it and start saving as early as possible. But, no one knows what life holds for them, so the earlier you can payoff your mortgage, the more time you will be stress-free, and stress is a major cause of illness, so think about it that way! You can always increase your retirement contributions after you payoff the mortgage early.
6. Purchase used cars in good condition to eliminate car payments. Maybe you have a friend who loves new cars and keeps his or her cars in excellent shape, or read consumer news for the best used cars. Either way, find autos that eliminate your need to get a car loan and have excellent maintenance ratings.
7. Write down every monthly bill and find ways to lower those costs. You can always switch providers or use the threat of leaving to get a better deal. There are many web sites that let you compare costs from different companies for almost any service. This works for cable, phone, electricity, insurance, etc.
8. One of the best ways to maximize your payments to principal is to ensure that your paycheck is accurate in terms of the taxes that you are paying. You should not owe any taxes at the end of the year, and you don't want to end up paying money to the government. If you overpay, you are wasting an opportunity to pay down more money every month.
9. Reduce your monthly expenses by meticulously paying attention to what you spend your money on or use (from an energy standpoint). Install programmable thermostats that lower the heat temperature and raise the air-conditioning temperature. Buy mini oscillating heaters (with safety shutoffs) for each bedroom and turned off the heat from 7 p.m. until 4 p.m. the next day. Close the vents in any room that are not in use. Use compact fluorescent light bulbs. These changes can reduce your monthly bills by 50%. Buy energy efficient appliances.
There are many ways to skin a cat, so do whatever it takes to create an environment that will allow you to payoff the mortgage early. If you reduce this fixed cost, you will reduce your stress, reduce the strain on your finances, give you an opportunity to change careers, and allow you to withstand job losses and other financial challenges better in the future.
So, how can you get there?
1. When you are younger, make a diligent effort to avoid wasting money on things that neither you nor your young kids need. Expensive toys will be enjoyed by your kids for about 5 days, and then they will move on to something else. Why buy that big screen TV if you can make your mortgage go away a lot faster, or at least shop around and buy an inexpensive one (like Vizio). And, don't take costly trips when the same theory applies to your kids; they won't remember the experiences and you could use those funds to payoff the mortgage early.
2. It is imperative that your first track all of your monthly expenses and then lay down a budget and follow it. The budget needs to include how much money you plan to pay towards your mortgage principal each month.
3. Refinance when you see the rates drop; this can potentially reduce your interest payments and allow you to take that extra money and make extra principal payments against your mortgage. Today, 30 year interest rates are around 4%, so if you are in the 5-6% range or higher, it is imperative that you refinance.
4. When you receive a windfall, you need to immediately use those funds to contribute to paying off your mortgage. Make an extra principal payment. Don't go out on a shopping spree; make a decision to see teh future without a mortgage. Any extra cash, including a second job's income, a bonus, a raise, money you inherit, etc. needs to help towards paying off your mortgage.
5. Retirement is important, and your should plan for it and start saving as early as possible. But, no one knows what life holds for them, so the earlier you can payoff your mortgage, the more time you will be stress-free, and stress is a major cause of illness, so think about it that way! You can always increase your retirement contributions after you payoff the mortgage early.
6. Purchase used cars in good condition to eliminate car payments. Maybe you have a friend who loves new cars and keeps his or her cars in excellent shape, or read consumer news for the best used cars. Either way, find autos that eliminate your need to get a car loan and have excellent maintenance ratings.
7. Write down every monthly bill and find ways to lower those costs. You can always switch providers or use the threat of leaving to get a better deal. There are many web sites that let you compare costs from different companies for almost any service. This works for cable, phone, electricity, insurance, etc.
8. One of the best ways to maximize your payments to principal is to ensure that your paycheck is accurate in terms of the taxes that you are paying. You should not owe any taxes at the end of the year, and you don't want to end up paying money to the government. If you overpay, you are wasting an opportunity to pay down more money every month.
9. Reduce your monthly expenses by meticulously paying attention to what you spend your money on or use (from an energy standpoint). Install programmable thermostats that lower the heat temperature and raise the air-conditioning temperature. Buy mini oscillating heaters (with safety shutoffs) for each bedroom and turned off the heat from 7 p.m. until 4 p.m. the next day. Close the vents in any room that are not in use. Use compact fluorescent light bulbs. These changes can reduce your monthly bills by 50%. Buy energy efficient appliances.
There are many ways to skin a cat, so do whatever it takes to create an environment that will allow you to payoff the mortgage early. If you reduce this fixed cost, you will reduce your stress, reduce the strain on your finances, give you an opportunity to change careers, and allow you to withstand job losses and other financial challenges better in the future.
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Looking to payoff your mortgage early? Mortgage Payoff, then you need to take charge of your financial future.
