Tips on how to pay off your mortgage early

Some refinance programs can help

Paying off your mortgage in 10 years might sound impossible, and it is — for some homeowners. In fact, some people need decades to pay back the home loan they borrowed from the bank.

However, for the financially savvy, paying off a mortgage ahead of schedule is possible. It just requires some strategic planning and creative cost-saving measures.

By using the following tips, you can kiss your mortgage loan goodbye and save money on interest payments.

RENT OUT SPACE IN YOUR HOME

Thanks to the new “sharing economy,” it’s easier than ever to make money off the unused space in your home.

You can rent rooms or your entire house to students or vacationers through sites like Airbnb.com, or opt for long-term tenants while you live somewhere less expensive.

Sharing your space with strangers might sound uncomfortable, but you’ll never know until you try it. Plus, hosting students and Airbnb guests is a relatively short-term commitment. You don’t have to keep doing it if you decide it’s not worth the savings.

ACCELERATE YOUR MORTGAGE PAYMENTS

This might be the easiest path to living mortgage-free. According to DaveRamsey.com, if you make one extra mortgage payment each quarter you’ll save $65,000 in interest and

pay off your loan 11 years earlier than planned, given a 30-year mortgage with a 4 percent interest rate.

To make the process as painless as possible, simply divide your mortgage payment by 12, and add that amount to each monthly payment. Make sure the payment is applied to the principal balance and that your lender doesn’t charge any prepayment penalties.

MAKE BI-WEEKLY PAYMENTS

The bi-weekly payments system is meant to cut short your loan’s amortization schedule. So instead of making a full payment every month you make one-half payment every two weeks, which adds up to 13 payments a year.

According to TheMortgageReports.com, with each 13th payment, the principal balance of the loan gets reduced, which shortens the payoff period.

Some banks can set up this payoff plan for you, but you should probably do it on your own.

That way, you won’t be locked into a bi-weekly payment contract with the bank if you change your mind.

REFINANCE YOUR MORTGAGE

Refinancing your mortgage loan can help you in a few different ways:

You can shorten the loan and brave through higher payments until it’s paid off.

Or you can get a lower interest rate.

These refinancing options could shave years off your mortgage and save you thousands in interest, as refinancing gives you the opportunity to draft up a brand new loan.

If you don’t have much — or any — equity in your home, you might qualify for HARP, also known as the Home Affordable Refinance Program.

To qualify for HARP, you must be current on your mortgage, your home must be your primary residence, your loan must be owned by Freddie Mac or Fannie Mae, your loan must have been originated on or before May 31, 2009, and your current loan-to-value (LTV) ratio must be greater than 80 percent.

If paying off your mortgage in 10 years just isn’t going to work for you, there are still other ways to reduce the payoff time.

Set a payoff date. Use an online mortgage calculator to set a payoff goal that is challenging but attainable.

Increase your earnings. Take extra shifts at work, wait tables on the weekends, pick up holiday or seasonal work, freelance, pet sit, dog walk or do odd jobs to bring in extra income.

Get super frugal. Start eliminating all unnecessary expenses: Cut cable, change your insurance plan to reduce your premium, and stop eating out or buying new clothes. It might sound extreme, but it works.

Make a lump-sum payment. If you receive an inheritance, tax refund or bonus, apply it to the principal balance of your mortgage loan.

The interest savings could be better than any potential investment.

Round up your payment. Rounding up your mortgage payment, even by just a few dollars, can help you pay off the loan early.

Use this round-up calculator from HSH.com to find out just how much you can save.

By making a few sacrifices and sticking to a plan, you can be mortgage-free — and hopefully debt-free — sooner than you thought.

THINKSTOCK There are a few ways you can pay off your mortgage quickly.

THINKSTOCK By making a few sacrifices and sticking to a plan, you can be mortgage-free sooner than you might think.