When you've taken out a mortgage you have made a very long-term commitment. For the next 30 years, in most cases, you have just signed on the dotted line at a mortgage closing and you must make timely payments each month for a long time or risk losing everything! So, is it worth it to try to pay off a mortgage early and make this long-term commitment a little shorter? This article examines this question. There was a time ppay off mortgage early as you could was the only way to go. This, of course, is provided the family had enough extra income to make extra mortgage payments. Why was making extra payments such a smart move? Because interest is what you pay for the time the lender is loaning you money. If you don't use this time, you do not pay interest.

The key question to ask yourself to pay off mortgage early is whether you can afford the mortgage. I'm not referring to whether you can afford to make the monthly mortgage payments, but I am asking whether you can afford to pay almost double the interest over the life of your mortgage. For example if you borrow $200,000 in mortgage principal, you can end up spending over hundred thousand dollars over 30 years. By paying off your mortgage early you can save thousands and slash years off your mortgage payment. Think back for a moment in time when you had massive credit card debt. Let's assume you made a big purchase and you owed over $2000 in credit card debt.

So, if the person who was paying this mortgage were to pay another $110 with his first payment, he would have paid off another whole payment without ever having to pay the interest on this payment. In other words, paying an extra $110 would save him almost $2,100. Of course, as time goes on the percentage paid toward interest becomes less and the part applied to principal becomes more. Still, on the 36th payment, less than $150 of this mortgage would go toward principal. So, adding another 150 bucks to this payment would pay the 37th payment.

You should also consider the length of time you plan to stay in the home before deciding whether to pay off the mortgage or stick with the payment schedule. If you will be moving within five years, you shouldn't pump extra money into your mortgage. You don't want to have all your money tied up in a home and then not be able to sell it. Not many of us can afford to juggle two mortgage payments.

Finally, you also need to do your math homework ad figure out if you actually benefit from the tax deduction allowed from your mortgage. You can calculate this tax savings by multiplying your annual mortgage interest by your total tax rate (federal plus state). Note that your tax savings diminish the further you get into the loan because more money is applied toward the principal.

Learn more about Obama Mortgage Relief Plan Qualifications.