How to pay off your mortgage faster?

By Bruce Firestone | Business Coaching

Apr 12

Try this:

  1. reduce your amortization period from 35 years to 30, from 30 to 25, from 25 to 20, even down to 11 years if you can afford it
  2. pay your mortgage every two weeks (not twice a month)—you’ll make 26 payments a year instead of 24
  3. rent out a room on Airbnb or other home sharing platform, take in and care for a senior or rent a basement apartment or a backyard coach house or workshop or put a yurt in your backyard and rent that out as an urban glamping experience 😊, apply the extra income from that to your mortgage
  4. start a home-based business (two ladies use their home for Hello Kitty birthday parties for girls ages 6 to 11) and apply that extra income to your mortgage
  • 5. don’t accept lender mortgage life insurance—it’s much more expensive (in most cases) than just getting separate term insurance, use the money you save to increase your mortgage principal payments
  • 6. if you have the discipline, make an annual lump sum mortgage principal payment
  • 7. grow your own food if you have a yard, apply money you save on your food budget to your mortgage—this is called backyard homesteading
  • 8. replace your home phone with an internet phone or just use your cell phone, apply money you save on this and from other cost savings (like getting rid of costly cable TV and replacing it with less expensive streaming services) to your mortgage
backyard all-weather glamping yurt anyone?

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD

Real Estate Investment and Business coach

Century 21 Explorer Realty Inc broker

Ottawa Senators founder

1-613-762-8884

bruce.firestone@century21.ca

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-MAKING IMPOSSIBLE POSSIBLE

-FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE

-FEHAJ, FOR EVERY HOME A JOB

-MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT

-HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, AND CITIES TOO

postscript 1: I even have clients who’ve moved to their basement apartment and rented out the main part of their home so that they can pay off their mortgages faster…

postscript 2: once you have paid off your mortgage, you will benefit from a little understood principle–called “unearned rent.” It’s real but not easy to comprehend. Once you’ve paid off the mortgage on your principal residence, you will feel like you have more cash available and, it’s true, you will.

Here’s how: Say, you move out of your house and rent it for $2,000 per month. Cool. You have an extra $24,000 a year in income (ignoring for now any expenses against this new income stream of yours). But you have to pay taxes on this; let’s assume 1/3, so you are left with $16,000 in after tax income.

Still, you have to live somewhere, so you rent a nice place (equivalent to the home you just vacated) for $2,000 a month or $24,000 per annum. This rent is paid with after tax dollars.

Bottom line: By not renting out your home and moving into a rental, you are better off by $8,000 per year. This is a real, if suspiciously hard to grasp, bonanza that comes from home ownership and mortgage paid off!

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.

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