If you're like many homeowners, you dream of paying off your mortgage early.

It can mean a more secure retirement, more cash for your kids' college tuition and a massive savings on interest that you would have paid over the remaining years of the loan!

Here are three ways to make it work.

Our example mortgage for this article is a $200,000, 30-year fixed-rate loan with a 4% interest rate. We also assume that the home cost $250,000 and that the buyer made a down payment of 20%, or $50,000.

1. Make payments more often

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If you make payments more frequently, you'll save money in interest charges over the long run.

Making payments more frequently will allow you to pay down your principal faster and save money in interest charges over the long run.

In our example, the monthly payment is roughly $955. You could resolve to pay half that amount — $477.50 — every other week. Doesn't sound too painful, right?

But you'd wind up making the equivalent of one additional monthly payment each year. And that's all it would take to shorten your payment period by three years and one month — and save you nearly $15,000 in interest!

2. Make a lump-sum payment

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Do you have an inheritance, bonus or tax refund?

Did you get an inheritance, a bonus or a tax refund? Apply it to your mortgage! Even a relatively small amount of money can help cut the time you'll be in debt and save you money.

A lump-sum payment applied directly to your outstanding principal lower cut your interest costs by a surprising amount.

For example, if you were to make an extra $5,000 lump-sum payment on our sample mortgage, you would end up paying $11,126 less in interest and would trim 17 months off your schedule of payments.

3. Refinance to a mortgage with a shorter term

refinance your mortgage
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Refinancing your mortgage can be a great financial move.

Refinancing to a shorter-term home loan can slash your interest costs, allow you to build equity more quickly and get you out from under mortgage payments sooner. But you may face a stiffer monthly payment.

After five years, the $200,000 mortgage in our example would still have a balance of about $181,000.

You could refinance into a 15-year mortgage, slashing 10 years off your remaining loan time. A 15-year loan comes with a lower rate than a 30-year mortgage, so you might score your new loan at 3.5%.

Reducing your loan term and interest rate in this manner would save you almost $54,000 in interest charges!

However, you'd have to manage a new monthly payment of about $1,294 — an increase of almost $340. Every month. Could you handle that?

Continue reading on the next page.