The Next 30 Years

Mortgages. What a pain! Recently a coworker and I were chatting about how the ratio of the cost of housing has gone up so much faster than the ratio of the amount we are getting paid has. She was telling stories about how she paid 20k for her first house (and how gas was 23 cents a gallon). I was in disbelief. I can only imagine what kind of equity one would have on that house now-a-days! It's true. Houses are one of the largest (and for most of us THE largest) purchase that we will ever make. Here are some tips that I have come across that are small changes but make a huge impact.

Bi-weekly payments instead of monthly payments creates one extra mortgage payment by the end of the year. On a 30 year mortgage that brings you to pay off a few years early.

It's wise to make extra principle payments monthly. Whatever you can afford. $50, $75, $100. It doesn't matter. It is all less that you have to pay interest on.

Taking all bonuses and raises, or any other lump sum- tax refund, inheritance- and applying them straight to your mortgage principle will allow you to pay your house off early, without sacrificing your current way of life.

It's also worhtwhile to look at refinancing when the rates drop. Although, keep in mind there are fees when you decide to refinance. Make sure to crunch those numbers to find out the cost first.