If you are just starting out and are looking to purchase your first home or you want to reduce your mortgage payments and pay-off your mortgage sooner, one option is to purchase a property that has an income component to it that you can rent out. This could be a property with a self contained in-law suite with its own private entrance, kitchen, bathroom e.t.c, or you can rent out a spare room in your home to a tenant that you have taken the time to screen properly for compatibility. The goal is that you apply the rent payments you collect each month towards your mortgage, which will result in you reducing the number of years and interest you end up paying on your house.
Do you know that depending on the interest rate, if you make the minimum payment on your mortgage each month and do not include any extra top-off amounts, you end up paying almost as much as your initial purchase price of the house in interest ! For example if you buy a $200,000 house and your mortgage is 5% amortized over 25 years, you pay $148,963 in interest. (For a grand total of $348,963).
However when most people are asked the price of their house (if the scenario above was theirs) they would say $200,000 instead of $348,963.
Bottom line, the sooner you can pay off your house, the less interest payments you end up giving to the bank = more money in your pocket.Your House,