Baby Step 6 Pay off your Home Mortgage


 

This step has a prominent place on my own personal vision board.  This step, once completed, will launch you into wealth building. Once you have completed this step, you'll be able to save money faster.  This step involves paying off your mortgage. You can complete this step at the same time that you complete steps 4, 5, and 6.  In short, you can invest, fund your kids college fund, and also work towards paying off your home loan all at the same time.



Here are some handy tips towards paying your mortgage off early.  Check with your mortgage company to see if they allow you to make bi weekly payments. If you pay half of your mortgage every two weeks you will make 13 payments instead of 12 payments in a year. This saves you thousands of dollars on the principal on your loan. You want to check with your mortgage company to ensure you don't incur any prepayment penalties. You also want to follow up to ensure that your mortgage company is posting your extra payments to your account appropriately.



If you'd rather not use the extra payment and you want to attack your mortgage more aggressively perhaps. Here's another method.  Remember the debt snowball? You can attack your mortgage with the extra money that you've freed up by paying off your debts. Apply your debt snowball tactics to your mortgage. 




Refinancing your home is another option.  The goal is to get an interest rate lower than your current rate.  If you have a 30 year mortgage, refinance for a 15 year mortgage. Your payments will be higher but your home will be paid for sooner.  If you don't want to refinance, you can still calculate the payments for a 15 year mortgage and make payments in those amounts instead. 




Downsizing your home is another option. This can be a hard decision to make, especially if you have lived in your home a long time. Selling a home and pocketing the equity or rather putting it towards the purchase of another home can be an excellent method of paying off a mortgage faster.  This is a huge goal, but it is one that can be accomplished. Faith, a solid game plan, and hard work are enough to accomplish almost anything. 






Comments

Post a Comment

Popular posts from this blog

Baby Step 2a: The reason your debt snowball isn't working part 1

Image
 You’re not budgeting You’re not 100% focused on your lowest balance Your income and expenses are remaining the same Your spouse isn’t on board You aren’t consistent You aren’t tracking your progress This is the step that I struggle with. The Debt Snowball. It would be easier to pretend like I didn’t have issues with this, but I am not. Most wounds don’t heal unless exposed. After Renardo and I remarried, we began budgeting, saving, and hustling for our dream…owning a home. We managed to obtain our dream only to slide back into old habits. After obtaining our home, we generated more debt. We recently bought a new house, a new car, among other things. We were sensible in our purchases, and can afford everything we bought, but we did not go in the direction that was most beneficial to us. Debt reduction. A lot of the pointers that Dave Ramsey espouses, we did not follow. So, I know the struggle is real. Step 2 is the step that I struggle with. One of my goals is to one day overcome our h
Read more

Felicia Gill Bio- Career Advisor at Calhoun Community College part 5 of 5

Image
People always ask me, “Why non-profits?” My answer: Don’t let the non in non-profits fool you. All the money in the world is tied up in Non-profits. Any cooperation you can name has a 501 (C)(3), a non-profit status attached to it. Non-profits will never go broke. There will always be money and resources for the poor. Being currently employed by Alabama Community College Systems at Calhoun Community College as a Career Advisor and prior employment at Concordia College Alabama as an Academic Advisor has afforded me the opportunity to have more tools in my tool box. My area of expertise consist of:  • Career Advising (Your Interest can be your income) • Career Exploration • Resume reviews and resume writing • College entry resume  • Mock Interview • Academic Advisor • “What Can I do with my Major” • Networking • Changing Careers • Learning Disabilities and resources So, if you are thinking about a higher education, go for it! You are never too old.  Just know that bei
Read more

Budgeting

Image
Dr. Lynn Richardson, a financial coach for the stars, suggests that you do several things to improve your finances.  Some of the suggestions are simple, for example, spending less than you make.  My late brother-in-law, Levorn Sanders, used to say, “You’ve got to watch your money, because it can’t watch itself.”  I would suggest that you make out a budget to help you with this. Make a list of every bill you have and allot money you pay to each bill.  When you have done this, take your net take home pay and see how much money you have left over.  Does this amount match up with what you have extra at the end of the month? If it doesn’t, you should consider trying to track your daily spending. Tracking my daily spending has always been hard for me. I forget to log in an amount, or I draw money out and forget where I spent it.  To fix this I tried a free app called Mint. This app was supposed to track my every withdrawal from my accounts and also give me financial advice. The issue I ran i
Read more