How do I Accelerate Payments on a 30-Year Fixed Mortgage?

Paying property off early can ease your stress level.

Paying property off early can ease your stress level.

When you bought your house, you were proud of the great deal you got. Now that you have had a chance to look things over, however, you realize that when you pay out your 30-year mortgage, you will have paid out three times what you offered for the house. Accelerating your mortgage can save you many thousands of dollars, get the house paid off more quickly and put money in your pocket.

Step 1

Figure out if you have money to accelerate with. The desire to accelerate your mortgage is great, but if the money isn't there, the desire won't do it. List your bills and your income for the month and figure out exactly how much you have left after you pay everything out. If you cannot make at least 1/2 of a principal-only mortgage payment in addition to your normal mortgage payment each month, you will need to adjust your income before starting the acceleration process. This can be done by paying down other debts, such as credit cards, or taking on another job for additional income.

Step 2

Talk with your lender about your plans. Letting your lender know you are going to send in additional funds each month to be applied to the principal of the loan is a good idea. The lender can make a note in the computer letting accounting and others know what you have planned and why additional money may be coming in each month.

Step 3

Step up the payments. You can accelerate your mortgage by making biweekly payments instead of monthly payments. Making half payments every two weeks will reduce the period of amortization on your loan.

Step 4

Devote lump sums to the mortgage. When you get your tax returns, bonuses at work or other lump sum payments, apply them to the principal of the mortgage to accelerate your payoff date.

Step 5

Refinance the loan and change the terms. You can accelerate the payments by refinancing and having the new contract implement semimonthly or biweekly payments. This locks you into having to make them as scheduled and gives you a structured method by which to accelerate payment.

About the Author

Candace Webb has been writing professionally since 1989. She has worked as a full-time journalist as well as contributed to metropolitan newspapers including the "Tennessean." She has also worked on staff as an associate editor at the "Nashville Parent" magazine. Webb holds a Bachelor of Arts in journalism with a minor in business from San Jose State University.

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