Buying a home is likely the most expensive purchase you'll make. While a mortgage is inevitable, there are a variety of ways you can pay your down faster, thus saving money in the long term. Here are 3 ways you can pay down your mortgage early from RIS Media:

 

 

BIMONTHLY PAYMENT PLANS

Monthly payments are split in two equal amounts; the additional payment mid- month reduces the balance owing for the following month, thus decreasing the interest paid (since the interest paid is calculated based on what is owed on the principal, reducing the principal results in less interest paid over the long- run)

 

BIWEEKLY PAYMENT PLANS

Payments are made every two weeks, each equal to half the monthly total. This results in 26 annual payments instead of 24, significantly shortening the length of the term. However, there are no intra- monthly interest savings as found with the bimonthly option.

 

ROLL YOUR OWN EXTRA PAYMENT PLANS

Based on what you can afford financially, make additional payments within the guidelines of your mortgage. You can increase your incremental payments, or make lump- sum deposits to reduce your mortgage faster. This is a flexible option to consider when you have put extra cash aside.

 

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Original post: Alternative Ways to Pay Off Your Mortgage Early

By Jack Guttentag 

 

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