Finance Friday

Finance Friday: How To Pay Off Your Mortgage With Only One Income Earner

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I dream of a 100% debt-free life. A bigger house. A mom cave with pink champagne glasses, all white furniture, fine antique China, a master vegan chef, and a fully stocked library. Basically, a no kid zone, without a toy in sight. It would be a place where I could gather my thoughts, gain knowledge, eat well and get both my sexy and my sanity back. However, I’m not satisfied with a pseudo luxurious life that is only fulfilled while I sleep, I desire more. In order for my colorful dream to become a reality we have to pay off our current mortgage.

Here are 5 tips to pay off your mortgage on one income:

Refinance

Paying off one loan with another is refinancing. Talk to a financial advisor about free no cost refinance options that are available to you. Discuss your goals and financial situation so together you can decide which refinance loan is right for you. Fortunately, we were able to save $500 on our monthly mortgage bill by refinancing through our lender with no out-of-pocket costs. Our interest rate went from 5.5% to 3.5%, which helps us save thousands of dollars over the entire life of our loan.

Pay Extra With What You Can Spare

Pay as much as you can sensibly. Look at your monthly mortgage bill as the suggested amount needing to be paid, but may more. Similar to how you would pay more than your minimum balance on your credit card statements.

Double Up By Sacrificing Some Luxuries

If you can, pay your mortgage twice a month. Not everyone will be able to do this, but some of you can. For us, we are making material sacrifices to double up on our mortgage. Our goal is to pay off our 30-year fixed mortgage 17 years early. For me, in order to pay double I sacrifice going to the hair salon, nail salon, and uneccessary retail therapy (no wonder, I keep dreaming of a mom cave).

Use Your Tax Return

If you refinance, and don’t have extra income to double up, consider using some of your money you saved by reducing your interest rate and your tax return to help you make an extra lump sum payment to finish paying off your mortgage sooner.

Be Disciplined With Your Finances and Lifestyle

Set a goal for how soon you want to pay off your mortgage and create a plan and follow it. Many banks have mortgage calculators that will tell you how much you need to pay each month to reduce the years left on your mortgage loan.

Sometimes people want to live like celebrities and CEOs on an entry level salary. Either change your career status and become an income-making boss; marry someone like Warren Buffet, Bill Gates, or Oprah; or Live Within Your Means!

Paying off your mortgage can give you financial freedom and independence to make other dreams you have a reality.

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