How to pay off your mortgage before maturity

Homes are the most expensive purchases many people will ever make. While home ownership can be rewarding, first-time homeowners may experience some sticker shock when shopping for homes and calculating their potential mortgage costs. But as expensive as home ownership can be, there are ways for homeowners to pay off their mortgages long before those loans reach maturity.
• Pay extra each month. Factors like home value, property tax and your mortgage loan interest rate determine how much your monthly mortgage payment will be. But there’s still room to save. According to the Chase extra payments calculator, homeowners who borrow $200,000 (after making an initial 20 percent down payment of $50,000 on a home valued at $250,000) at 4 percent interest and pay $4,000 annually in property taxes and homeowner’s insurance can save more than $26,000 in interest over the life of the loan by paying as little as $100 extra per month. In addition, including an additional $100 each month will trim 59 months, or just about five years, off the life of your loan.
• Stop paying PMI. If your initial down payment was less than 20 percent of the value of your home at the time you purchased it, then you were likely required to pay private mortgage insurance, or PMI. PMI may be costing you a couple hundred dollars per month, but once your mortgage balance falls below 80 percent of your home’s appraised value, you can ask your lender to stop charging PMI. While it might be nice to pocket those PMI costs for a rainy day, continue paying that money each month so you can shorten the life of your loan.
• Have your home reassessed. While homeowners would like to think the value of their homes is always on the rise, some homes decrease in value over time. If your home is reassessed at a lesser value, your property taxes will decrease. Put the money you’re saving on property taxes toward your monthly mortgage payment each month.
• Refinance your mortgage. Refinancing to a lower interest rate can lower your monthly mortgage payment, but be sure that the costs to refinance do not exceed the savings you will earn. Apply any money you save from refinancing to your monthly payment.