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If you have a 30-year mortgage, you end up paying three times what your home is worth. In many cases, mortgage interest can account for two-thirds of the total amount that you pay for your home. Although paying off your mortgage early may seem difficult, it can pay off tremendously in the long fun. It only takes paying a few hundred extra dollars each month to save tens or even hundreds of thousands of dollars on your total mortgage costs. Paying off your mortgage early can also save you from having to refinance your mortgage loan.

Paying off Your Mortgage Early: Find Your Figures

Get out the last statement that your mortgage company last sent you or check the balance on their website. Also check your current monthly mortgage payment and your interest rate. Find the amount that you're paying for escrow each month. Subtract your mortgage escrow from the total mortgage payment. This is the amount you're paying for principal and interest on your mortgage each month.

Paying off Your Mortgage Early: Use a Calculator

Navigate to a website with a free mortgage amortization calculator. Type in the balance on your loan, the interest rate and the number of years in which you would like to pay it off. Make a note of the monthly payment the calculator recommends to pay off your mortgage early. Subtract the mortgage principal and interest amount you calculated in step 2 from this recommended monthly payment. This is the amount you will need to pay, in addition to what you are already paying.

Add your escrow payment to the monthly figure the mortgage calculator recommended. This is the total monthly mortgage payment you will have to make to pay off your mortgage in the time frame you want.

Paying off Your Mortgage Early: Create Some Extra Money

Take a look at your monthly expenses in relation to your income. See if there's enough extra money each month to cover the additional mortgage payment. If there isn't, see if there's any place that you can cut back expenses. Try cutting back on eating out, driving less to reduce your gas bill, cutting back on convenience foods at the grocery store, making your home more efficient to save on electricity or shopping less often. Also, see if you can make a little extra money on the side. Take a second job in the evenings or on weekends, or find a legitimate work-at-home opportunity such as doing data entry or writing for the web.

By following these simple tips, you can find yourself much closer to financial freedom. Be sure to also look at other areas where you can reduce expenses by getting out of debt and saving on interest.

Learn more about this author, Jennifer Claerr.
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