Pay off the House

Step 6: Pay off your house early.

According to the census bureau, the average mortgage payment is $1,100 per month.

Perhaps the number one reason to pay off your house early is FREEDOM.

Once you pay off the mortgage, the bank no longer owns your home. YOU own your home!

If you lose your job after paying off the mortgage, you still own your home (as long as you pay your property taxes).

If you are going into retirement, and will be living on a fixed income or off of retirement savings, it will also be nice to not have the large expense of a mortgage payment each month.

Paying off your house early can save thousands of dollars in interest as well. The example below will illustrate how paying off the mortgage early can save thousands.

For a this example, lets say you have a $300,000 (Loan Amount) Mortgage and the interest rate is 5.27% equaling a monthly payment of $1,660.

30 year mortgage - If you take the full 30 years to pay, your loan would cost $597,719. Over those 30 years, you would have paid an additional $297,719 in interest!

15 year mortgage - If you take 15 years to pay, your loan would cost $434,662. In 15 years, you would have paid an additional $134,662 in interest!

10 year mortgage - If you pay the same loan off in 10 years, your loan would cost $386,605. You would have paid an additional $86,605 in interest.

What if you pay your mortgage off early ( in 15 years) and you invested the $1,600 per month in a mutual fund that returns 7% for 15 years? You could have $507,000!!!