My wife and recently purchased our first home. Here is my plan to pay off our 15 year mortgage in 10 years – or less!
Opening Fire – We will us online bill pay to make our regular, monthly mortgage payments. I have already scheduled for our monthly payment to be sent from our bank to our mortgage company on the 15th of each month, the day after I receive my monthly paycheck. The mortgage account number is listed in the memo section of each payment check. Even is we do nothing else, we can be confident that our monthly payment will be made early, and on-time.
Steady Assault – I have scheduled an additional monthly payment, designed to reduce mortgage principal, to be sent on the 20th of each month. I included the 5 day buffer, just to keep things nice-and-neat. This additional payment is above-and-beyond the regular monthly mortgage payment and is a fixed monthly-amount.
Sniper Attack – I am a big fan of micro-payments – those small, irregular payments that can be made throughout the month. Just as I did when I was reducing my consumer and credit card debt, I plan to use micro-payments, this time to reduce my mortgage principal. Throughout the month, if I see that I am spending less in a particular budget category than I had originally planned, I will use this leftover money to make a micro-payment. The first types of payments, the regularly scheduled monthly payment and the regularly scheduled extra payment, are hands-off. Once they’re set, they pretty much work on their own. These micro-payments, however, keep my head-in-the-game and really create a sense of accomplishment.
Secret Weapon - I make a little money from my blogging activities. Over the past few years, this money has gone towards “extras” for around the house. From now on, any money earned from blogging (or other side jobs) will go directly towards mortgage principal reduction. The more I make from blogging – the faster we own our home!
There you have it – our plan of attack! We are super-excited about our new house and ready to start paying it off. With three kids and modest income, it’s not going to be easy, but we are determined and we have a plan. Rock on!
Image by - Danny Fowler