How to succeed with money in divorce — paying off your home mortgage in ½ the time

I don’t know about you, but I’m not a fan of paying my mortgage.

Don’t get me wrong, I like my home; I just don’t like paying for it. Well, I’m fine with paying the principal, but not the interest, really.

Unfortunately, if you have a conventional thirty-year loan, a full half of the price you pay for your house is interest. That’s right, you pay just as much in interest as you do in principal. So, a $250,000 home actually costs $500,000 or more by they time you pay it off.

Thankfully, there is a way to pay off your mortgage in approximately ½ the time. And the best part is it doesn’t cost extra money and it’s simple.

Here’s what you do: pay your monthly mortgage payment, then pay next month’s principal payment early.

For example, if your mortgage is $1500 per month, the principal may account for $400 of that payment (the rest is interest, taxes, mortgage insurance, etc.). If this is the case, you would pay $1500 for the monthly payment, then pay $400 for next month’s mortgage.

All you’re doing is paying next month’s principal a few weeks early.

The beauty of this system is the $400 is paid interest free. And, again, you’re not paying more money; you’re just paying part of your mortgage early.

Analyses demonstrate that this method cuts approximately fifteen years off a conventional thirty-year mortgage.

So, if you’re like me and you want to save money and not pay monstrous interest payments on your home, paying next month’s mortgage a few weeks early is a pretty enticing option.

P.S.: Another way you could got about paying off a home in fifteen years is to refinance your current loan to a fifteen-year loan. Interest rates on these loans are lower than on a conventional thirty-year loan, although standard monthly payments are (obviously) a bit higher.

P.P.S.: Hat tip to Tony Robbins and his book Money: Mastering the Game, pages 253-255, for this tip.

P.P.P.S: For more tips on how to succeed with money in divorce, click here, and here.

Published On: April 9th, 2016Categories: Financial PlanningComments Off on How to succeed with money in divorce — paying off your home mortgage in ½ the time
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About the Author: Marco Brown
Marco C. Brown was named Utah’s Outstanding Family Law Lawyer of the Year in 2015. He graduated with distinction from the University of Nebraska College of Law in 2007 and is currently the managing partner of Brown Family Law, LLC.
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