6 ways to pay off your mortgage faster

Courtesy of Kalyn Brooke

A mortgage is expensive.

Buying a home is one of — if not the — biggest expenses a person will ever have, says Kalyn Brooke in her book, "31 Days of Radically Reducing Your Expenses."

Brooke, founder of lifestyle site Creative Savings Blog, was content with making the minimum payments for her mortgage, but soon realized how much it was affecting the rest of the budget.

"My wake-up call happened the first time I really looked at that end-of-year mortgage statement in the mail and realized how much interest I was paying on top of my loan," she writes. "I promised myself right then and there that I would do whatever steps necessary to pay my mortgage off as quickly as possible."

Currently, Brooke and her husband are working towards paying off the mortgage on their first home in New York along with making payments to their new second home in Florida. 

Here are six tips Brooke shares to help whittle down your payment:

1. Make one extra payment per year

This is perhaps one of the most beneficial steps you can take to help lower your mortgage payments, according to Brooke. 

"Even if you don't do anything else, make just one extra principal payment every twelve months," Brooke writes. "Not only will you shave years off your loan, you'll also save thousands of dollars in interest."

If you don't have the cash on hand all at once, Brooke suggests talking to your bank to find alternatives to making a one-time payment, such as sending extra payments every two weeks to spread out the impact.

2. Knock out PMI

Private mortgage insurance (PMI) is an additional fee tacked onto your monthly payment to protect your lender if you don't make enough payments.

You only pay PMI if your down payment is less than 20% of your home cost, so if you're abiding by the traditional advice that recommends putting down that 20%, you should be in the clear.

However, if you put down less, you're probably paying this extra fee. If you're being charged PMI you should know it, but you can also reach out to the holder of your loan to find out how much it costs.

Brooke suggests making extra payments to get 20% equity in your home and eliminate your PMI to pay less on your mortgage every month.

"However, don't expect banks to keep track of this for you — I've heard stories of homeowners paying more PMI than they had to because they didn't stay on top of it," Brooke write in her book. "So keep track, and call your bank when you reach that 20% equity mark."

3. Consider refinancing

Refinancing your mortgage means getting a new loan to pay off your old mortgage at a lower interest rate, and Brooke suggests doing so when interest rates are low.

However, to refinance a home you have go through a round of closing costs, which is a collection of administrative fees required to process the new loan. It could be a few thousand dollars upfront, but "depending on how long you stay in the home it could be worth the upfront cost," Brooke writes.