Can anyone possibly still think holding the largest mortgage for the longest payback time is still a good idea? I've considered those opinions, but have not been won over. Now that billions and billions of dollars are not enough to save some of the largest banks (and 150 smaller ones in the U.S.), folks who study this say we're at the end of the first quarter of a four-quarter game. The reverberations will be felt around the world for years.

Pay Off Your Home as Quickly as Possible

If you possibly can, pay off your house as soon as possible, the earlier the better. Why? Your risk of losing it will decrease and your security, financial and otherwise, will increase.

All methods of paying off your home years sooner involve getting money applied to the principal of the loan before it's required. Whether you add $10 a month to your payment, specifying it's "for principal only," save your loose change and apply it once a month, or set up a biweekly mortgage payment plan–what all these techniques have in common is putting money on the loan sooner rather than later.

You may find it astonishing, but $5 extra applied to a 30-year fixed rate loan near the beginning of the loan, assuming the interest rate is 8%, will reduce the mortgage payback by $50! That's huge! The savings ($45) is a result of compounding. The first year, you pay 8% interest on the remaining loan balance. After you've finished that year, the next year you pay 8% on the remaining balance again. The last year of a 30-year loan will have 8% interest paid on it 30 times! (all but the last payment)

Put your tax return on your mortgage principal. Put birthday card money on it. Any money you put on it will serve to eliminate your interest percentage times the number of years remaining on the loan.

I'm working on a report covering 12 ways to pay your loan sooner. Be sure to sign up to make sure you can get a copy when I finish it: