During a recent conversation I mentioned that this summer it will be 10 years since I purchased my home. Her reply was that I only had 20 years left to pay it off. Actually, my goal is to have it paid off in another six years or so.
Over the first years of your mortgage, a majority of your monthly payments is interest. To save money on the interest and pay off your home early is to try to put money towards the principal at the beginning of your mortgage and pay extra along the way as you can. I was fortunate to be able to put a considerable amount towards the principal during the first years of my mortgage and over the years.
When you have a 30 year mortgage and make payments for the entire 30 years you may pay twice the original price of your home when including the interest you pay.
Paying off your mortgage early is one of the “7 Baby Steps” in Dave Ramsey’s book,
The Total Money Makeover. Before paying more towards your mortgage, it is important to have your other debts paid off, an emergency fund, retirement savings and college savings for your children.
Also included in the book are stories of people saving money and being able to purchase their homes with cash. Crystal from MoneySavingMom.com and her husband were able to purchase their first home with cash and recently purchased a rental property with cash.
A home mortgage in many cases is considered good debt, however in recent years many people may have purchased more home than they could afford or the values of their home dropped and now owe more on their home than it is worth.