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Take 9 Easy Steps To Pay Off Your House Fast

By Kate Ford

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Published: 20Jan2009
Word count: 884
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Would you like to pay off your house?

Here are 9 simple steps to pay off your mortgage in the shortest time possible. As you read every word of this article you will be amazed that there are no secret formulas, no tricks, nothing to buy, or any life altering decisions to make except perhaps one.

Decide you want to be mortgage free.

Now follow these steps to pay off your home.

Step 1 - First write down all your credit card balances and the minimum required payment. Also make a record of any additional loans such as personal loans and installment loans along with balances and minimum payments.

Now add to that list car loans, boat loans, and recreation vehicle loans including balances and payments. Lastly add in your mortgage payments and balances. Be sure to include second mortgages, lines of credit, and any equity loans.

Don't panic. If you have never performed this exercise before, it might make you feel a little anxious. But don't worry. You can do this.

Step 2 - Stop spending more than you make. This might mean cutting back on purchases you don't need. Decide today that you are not going to live beyond your ability any more. Once you embrace this idea with your whole heart you might be surprised how liberating it feels.

Step 3 - Now take the list you created in Step 1 and organize it starting with the smallest balance first and the largest balance last. Most likely at the top will be your credit card balances, followed by installment loans, personal loans, car and recreation vehicle loans, and finally mortgages.

Step 4 - Decide how much additional money you can free up to eventually pay off your house. You do not have to think big at this point. Your mortgage reduction program isn't as hard as it may seem.

Here is a simple example. Suppose you eat out one less time each week. If you spend $15 less per week for restaurant meals, you can save $60 per month. $60 is all you need to begin to pay off your house fast.

Step 5 - Begin your program by taking the lowest balance at the top of your list and adding the $60 you saved to its minimum payment.

Suppose the balance is $1000 on credit card number one and the minimum payment is $15. Simply add $60 to the minimum payment for a total of $75 each month until the balance is paid in full. It is important to continue making at least the minimum payments on all other debt.

As you make the payments each month, you are going to see the minimum required payment go down but continue to pay $75. You are accelerating the payoff each month.

Stay with me here because you are on your way to mortgage freedom.

Step 6 - Once you have paid off the first card, start on the second. Use the $75 you are paying on card one and add it to the monthly minimum payment for card two.

Suppose the second card's monthly payment is $75. With the $75 you are paying on credit card one, add it to the $75 minimum payment on card two for a total of $150. Pay $150 until card two is paid in full.

Step 7 - Continue the process with credit cards three and four until all credit cards are paid in full.

Then begin on installment loans, personal loans, car loans, and other vehicle loans one at a time. Work your way loan by loan keeping in mind your goal to pay off your mortgage.

Step 8 - Now the fun really begins. You started by simply eating out one less time per week saving $60 per month. You added the $60 you saved to the first credit card minimum payment. Then you added the monthly payments you made on the first credit card to the second card and the second to the third and so on. After the credit cards were paid off, you added the total to your recreation vehicle and then to car loans.

In a short period of time you have become entirely debt free, leaving you only with the need to pay off your house.

Step 9 - By now you have truly accelerated your program to pay off your home. Let's suppose by the time you finish paying off credit cards as well as all other loans that you have gradually worked up to applying $1000 per month to your debt reduction program.

Remember the only additional money you began with was the $60 saved from eating out one less time per week. Now you are going to begin to use the additional $1000 to pay off your mortgage. Let me illustrate.

If you have a $250,000 mortgage at a fixed rate of 6.5% for 30 years, your principal and interest payment would be $1,580. Take the $1000 you are using to pay down your other debts and begin to apply it to your mortgage each month.

Make certain to instruct your mortgage company to apply the additional payment of $1000 to principal.

In other words, you are going to make the regular monthly payment of $1,580 plus an additional $1000 to principle for a total payment of $2,580.

Now listen to this. Amazingly you will pay off your home in less than 12 years from the time you began the additional monthly principle payment. And all you did was eat out one less time each week.

Kate Ford, author of the entertaining Get Your Best Mortgage Rate understands how to save money with fixed rates. For additional programs similar to the 15 year fixed rate mortgage, visit Kate at Best Fixed Rate Mortgages today.

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