5. Pay more than the minimum.
Consider the monthly payment for any loan to be the bare minimum. If you can afford to pay
even a little extra toward principal, do so. You’ll reduce overall interest expense dramatically
and get rid of the loan sooner. After all, debt may be necessary at times, but it shouldn’t be
6. Save for a bigger down payment.
The bigger your down payment, the less you have to borrow. When buying a house, aim for a
down payment of at least 20 percent. Better to save a bit longer before getting a mortgage
than stretching to make payments you can’t comfortably afford.
7. Consider a biweekly mortgage.
Want to get rid of your mortgage fast? Consider paying half as much twice as often. A biweekly
payment does just that, shaving years off your loan and thousands off your interest. It works
because 26 half payments are the equivalent of 13 full payments—in effect, you make an extra
monthly payment each year.
8. Tread cautiously with a HELOC.
A home equity line of credit can be a simple, low-cost way to borrow small sums from time to
time, perhaps for home improvement or education. It also can serve as a ready source of
emergency funds. But be careful. Accessing the credit is as easy as writing a check. Don’t let
convenience tempt you to take on more debt than you can afford.