Some D-I-Y Mortgage Shorteners

Instead of applying and paying for the privilege of a bi-weekly mortgage, here are a couple of ways to do it yourself and shorten your mortgage length:

· Take your mortgage payment, divide by 12 (months) and add that amount to your check. Apply it directly toward principle.

· Get an amortization schedule from your bank (a list of principal and interest you will pay each year until payoff), and find the interest portion of the next 3 months’ payments. Add them together, and add this amount to your principal each month with a separate check. Three months of interest X 12 calendar months = 36 months of interest you’ll be pre-paying each year, shortening your mortgage time along the way. This plan can also be accelerated to fit larger budgets by including more than three months’ interest per excess principal payment. The more you can include in that excess principal payment, the faster you’ll pay the house off with less interest money paid!

This is also known as the Charles Givens snowball plan--see page 121. If you'd like other tips on how to make the most of your money, do read the rest of his book. the numbers may be outdated, but the concepts are the same, and still relevant (except the IRA stuff--we've had new regulations since then).