Your mortgage is likely your largest monthly bill. But if you use the following five hacks, you can make that slice of the pie easier to fit into your budget. You can even save money on your loan and pay it off faster if you use your savings right! Here’s how.
1. Share your space
It’s the ultimate mortgage payoff hack: get someone else to pay the bill for you! It may sound crazy, but it’s possible if you’re willing to share your living space with others in exchange for rent. Roommates can help share other expenses too. Just be sure you’re prepared to be a live-in landlord. Make the process even easier: You can list an extra bedroom using Trulia’s free Room For Rent service!
Renting out space in your house not an option? Look to other “idling assets” you may be able to monetize. You can share (and charge for access to) things like bikes and cars.
2. Use a mortgage accelerator
Mortgage equity accelerators are a newer product on the U.S. market, although homeowners in Australia and the U.K. have used them for years. These products work by opening an account with a line of credit that you automatically deposit your paycheck in each month. You can pay all your bills and living expenses out of the account. At the end of the month, whatever is left in the account is applied to your mortgage payment. The idea is that you’ll spend less than you earn — and much less than the cost of your mortgage — so the “extra” cash is automatically applied straight to your loan. That helps you pay it off faster.
The downside is that you may need to pay a service or company to set up a mortgage accelerator for you. The additional cost of having a third party manage the account could outweigh the potential benefit. With smart budgeting and good spending discipline, you could reduce costs and apply the extra savings to your mortgage on your own.
3. Cut your living expenses (with ease)
If you can hack some of the costs that come with owning a home, you can reduce your overall expenses and make it easier to pay your mortgage. This isn’t about depriving yourself or becoming a penny pincher. It’s about dropping or replacing expensive products and services with their less-expensive competitors.
You could say goodbye to your cable company and switch to streaming services. Netflix, Hulu, and Amazon Prime offer excellent programming and are a fraction of the cost of traditional cable. Even better, there are more savings to be had if you go in with friends or a sibling on a family plan — you might be able to trim the costs for your cell phone, streaming, and other services in half.
If you can’t cut the cord entirely, call your cable company and ask about different packages or service tiers that can help you save a few bucks each month. Another savings opportunity? Skip the expensive gym membership and use free alternatives such as streaming workouts online or lacing up your sneakers for a run.
Making swaps such as biking to work rather than driving or cooking at home instead of dining out can benefit your wallet and your waistline. Signing up for a grocery pick-up or delivery service can help you cut back on impulse buys — if you don’t set foot in the story, you won’t be tempted. Digital coupons, cash-back sites, and apps can make it easy to save on your necessities. It is possible to enjoy life more by spending less money!
4. Use your tax refund and other “bonus” money
Do you normally get a tax refund? Apply that money to your mortgage instead of spending it this year. Or look at your withholdings. You can adjust those to pay less in taxes throughout the year and keep more money in your paycheck. With this small salary boost, you’ll have more cash to pay on your mortgage every month.
You can use the same hack with cash from gifts, work bonuses, or any kind of windfall. Dedicate a portion of bonus money to your mortgage payment. And if the thought of using all this “extra” cash on something boring like a mortgage pains you, set aside a small amount — even just a dollar a day — for splurges and fun spending. Then use the rest to knock down the balance of your loan.
5. Put extra funds toward your loan’s principal
When you start using these hacks to pay your mortgage every month, you want to make the most of your savings. You can do that by using the money you save to pay down your home loan faster (as long as there’s no penalty for prepayment). Apply your extra funds in one of two ways. You can make an extra payment on your mortgage each month, or you can add the extra money onto your regular payment and pay more than what you owe each month.
Either strategy will help you pay your mortgage faster, which can save you tens of thousands of dollars in interest over the life of the loan. Just make sure any extra payment is applied to the loan’s principal and not just interest payments. To do so, you’ll need to be current on all your payments. Then call your loan servicer and ask if they have a process for putting extra payments toward the principal balance of your mortgage. Follow the steps they provide to make sure your money goes to the right part of your loan.