A great way to save thousands of dollars and shed years off your mortgage while building equity is to prepay your mortgage.

You can make payments directly towards your principle at any time. This will ultimately reduce the amount of interest you pay over the life of your loan.

Every cent spent over your minimum payment comes off of the principal balance of your loan.

Making one single additional mortgage payment per year will achieve the same result as making bi-weekly payments. Either action will shorten your 30 Year Fixed Rate Mortgage by approximately 7 years .

To increase liquidity and cashflow, take the extra money you would apply towards your mortgage and put it with a trusted financial advisor. This assists with keeping your tax advantage at a higher level and having money in an account that allows you better access to it. A good financial advisor can get you conservative returns of 8% which means your side account will grow allowing you to payoff your mortgage years sooner if you choose to!

Pre-payments are great — but your individual situation has to be considered. If housing values are dropping (in real, inflation adjusted terms) in your area, pre-payments might save you interest expense, but the equity that you are supposedly building is just disappearing. You might want to consider letting the bank assume the risk, and keep your money somewhere that will keep it earning above the rate of inflation.

Many people apply any federal and state income tax they receive towards paying down their mortgage. By applying your tax returns and making one extra payment a year you can drastically reduce the length of your home mortgage.