For bloggers Marquez and Shaira, who do not give their last name online, bought their home near Sacramento in 2009. By 2017, they paid off their 30-year mortgage. Paying off that debt has since allowed them invest in real estate and get passive income.
To pay off your 21 mortgage years earlierThey took two steps to save years on their mortgage and reduce interest arrears.
1. They used a simple calculation to make 2 painless additional payments each year.
Marquez and Shira decided to do their best to make additional payments towards their principal.
“The strategy we used before was the 1/12 rule. You take your monthly mortgage payment and divide it by 12, ”Marquez told Insider in an email. “If your monthly payment is $ 1,000, your 1/12 is $ 83. Then you make additional payment to your main balance of $ 83 “.
After receiving only 1/12 of their payment, they did not notice the extra money they put into their mortgage every month. “At the end of the year, you will pay the equivalent of one additional payment,” Marquez said. The couple estimates that this strategy helped them save five years on their mortgages.
Marquez and Shire made an additional payment 1/12 every two weeks to have even greater effect. They automated this additional payment so they didn’t have to think about it. Automation of payments can help you force yourself to follow a strategy consistently, whether you are saving, investing, or paying off your mortgage.
2. They took on whatever fuss they could and avoided unstable lifestyles.
For many people, earning more means spending more – experts call it “creeping lifestyle“This couple deliberately avoided precarious lifestyles as they increased their income through promotions, promotions and side business.
They made more money from their jobs through promotions, and Marquez used his talents as a musician to earn extra side money. “I used my gift to start selling music online, giving concerts on weekends, helping out music ministries in local churches and working as a studio session musician,” he said.
In the end, their side effects helped them make quick progress. “This strategy has had the greatest impact on our path to ROI,” said Marquez. “The harder you work, the more you can apply for a mortgage.”