The federal tax rebate was a big boon to a lot of families who used it to pay off debt, buy much needed but unaffordable items, or just put it away for a rainy day. But for those still deciding the best thing to do with it, think about paying some of your home loan down, a concept known as prepayment.

Using extra funds you have will pay your home loan down faster.

If you have smartly decided that you want to allocate these additional funds to build your future, you may be thinking about some other investments, such as stocks and bonds. The stock market may actually be the worst investment people want to make today, so investing more funds in your own home will turn out to be a wonderful investment.

Using this rebate or even any extra funds you come into to pay down the loan will shave small amounts that eventually add up to pay off your mortgage faster.

But even if you have already spent the tax refund, or don’t have a lump sum to allocate to prepayment of your mortgage, there are other ways to reduce this debt more quickly and save overall while you do so. You may not even have to affect your everyday spending habits to any great amount.

Just do without some small luxury, such as your gourmet coffee every morning, and devote the savings to an additional payment on the mortgage. Since interest piles up on interest in a mortgage, doing this reduces the total owed. You will simply be paying your loan off at an earlier date.

There is another wonderful ways to pay your mortgage down early without any financial pain at all. The secret is to make an extra payment on your loan each month, by dividing your payments in two, paying one at the beginning of the month and the other at the end of the month. Your total payment will be the same, but you will be lowering the loan more quickly with this extra payment.

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