Your financial situation is of utmost importance to the overall well being of your family. In this section we explore the many areas of your financial life in hopes of bringing some clarity on how to deal with common problems that arise from time to time.

Check out the column to the right to explore financial areas such as debt/credit management, insurance, career, and investments. Below we focus on how to get the most out of your mortgage.

5 Keys To Paying Off Your Mortgage Early

Every dollar you add to your regular payment each month puts a bigger dent in your principal balance—and you don’t have to double-down to make a difference. Adding just one extra payment each year knocks years off your mortgage!

Here are some options for paying extra on your mortgage and how those extra payments affect, as an example, a $220,000, 30-year mortgage with a 4% interest rate:

1. Make an Extra House Payment Each Quarter

You’ll pay your mortgage off 11 years early, and you’ll save more than $65,000 in interest.

2. Refinance Your Mortgage

The time to refinance is when you want to make a less-than-desirable mortgage better, not when you’re looking for extra money to consolidate debt or buy a new car.

Refinancing makes the most sense if you fall into one of these categories:

• You have an Adjustable Rate Mortgage (ARM)
• You have an interest-only loan
• Your mortgage has more than a 15-year term (such as 30 or 40 years)
• You have a high interest rate loan

In each of these scenarios, refinancing could be a smart financial move if it lowers your interest rate or shortens your payment schedule. The ultimate goal would be to lock in a 15-year fixed-rate mortgage with a new payment that’s no more than 25% of your take-home pay.

The best way to gauge if refinancing makes sense for your situation is to do a break-even analysis. If you know you’ll be in your home long enough to benefit from the savings a lower interest rate and lower payment could bring, then it’s probably a no-brainer to refinance.

Just estimate how long you plan on staying in your current home. Will you be there until your kids graduate and head off to college in four more years? Or is this your forever home you’ll retire in?

Once you’ve got your timeline in mind, figure out how long it’ll take for your monthly savings to make up for what you would pay in the refinance closing costs. And yes, there will be closing costs just like when you took out your first mortgage.

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3. Downsize Your Home

Downsizing your home could be a drastic step, but if you’re set on getting rid of your mortgage, consider selling your larger home and using the profits to buy a smaller, less expensive home.

With the profits from selling your bigger house, you may be able to completely pay cash for your new home. But even if you have to get a small mortgage, you’ve succeeded in reducing your debt. Now your goal is to get rid of that debt as quickly as possible. The smaller the balance, the quicker you can make it happen.

We all know hindsight is 20/20, but if you take advantage of the following tips before you purchase your next home, you will be in a great position to pay that mortgage off early.

4. Maximum Down Payment

The best way to buy a home is with 100% down. Paying cash for a home may sound weird, but imagine all the fun you could have without a mortgage payment weighing you down!

If you can’t postpone the purchase until you can pay cash, plan to put at least 10% down at the closing table. Of course, 20% is even better because then you’ll avoid paying private mortgage insurance (PMI). PMI typically costs between 0.5% and 1% of the loan amount annually. For example, on a $250,000 mortgage, PMI will cost you $1,250 to $2,500 a year. Why give the bank extra money each month if it doesn’t pay your mortgage down faster?

Keep in mind that the more cash you put down on the front end, the less money you’ll need to finance. That adds up to a lower mortgage payment each month, making it easier to pay off your mortgage early.

5. Bring Your Lunch to Work

Toting a brown bag to work every day won’t win you any fashion contests. But trading lunch out for eating in can make you a lean-and-mean, mortgage-free machine three years ahead of schedule. Applying your $100 a month in lunch money to your mortgage will also save you more than $28,000 in interest.

Other small sacrifices can go a long way to help pay off your mortgage early. Put Andrew Jackson to work for you by adding just $20 to your mortgage payment each month. Based on our example mortgage numbers above, you’ll pay your mortgage off a year early, saving over $7,000 in the process.

How much could you save if you took your Starbucks money and added it to your mortgage payment each month? According to the Acorns Money Matters Report, the average American spends $3 per day on their coffee. That’s around $90 a month added to your mortgage payments—which will save you $25,000 in interest and four years on the life of your loan!