How to Cut Years Off a Mortgage
- 1). Identify and total your recurring monthly liabilities. These include but are not limited to minimum monthly credit card payments, current mortgage payments and insurance(s). These liabilities are characterized by fixed payments, as well as fixed payment cycles.
- 2). Track and categorize other variable expenditures for one month (or use the preceding month). Categories can include utilities, groceries and entertainment.
- 3). Calculate your monthly take-home pay, factoring in all sources of income.
- 4). Subtract your monthly expenditures from your take-home pay. The difference is the amount of money in your budget available to use for principal reduction.
- 5). Determine the amount of additional principal you want to pay within the limits of your established budget. A number of quality Web-based mortgage payoff calculators enable you to visualize the impact of your additional principal payment.