Source: Flickr user Mark Moz.

For many Americans, their home is the linchpin of their finances. Your home is typically the most valuable asset on your balance sheet, and your mortgage is your biggest liability. That makes it critical for you to manage your finances around your home and to make smart decisions about mortgage debt that will ensure you'll be able to live in your home as long as you want.

One time-honored way to ensure financial stability is to build equity in your home. By paying down your mortgage debt, you increase the amount of money you'll be able to keep when you decide to sell your home, whether you decide to move at some point in your career or you wait until retirement before making a change in residence. But many homeowners get intimidated by the idea of paying down a six-figure debt. Fortunately, you can follow some simple steps to pay off your mortgage faster than you'd imagine possible. Let's take a look at three of them.

1. Add a little to your monthly mortgage payments
It never occurs to many homeowners that they can repay their mortgage in any way other than by making the regular monthly payments that their loan documents require. Yet most home loans allow prepayments without penalty, and taking advantage of those provisions can dramatically reduce the amount of time it takes to pay down your mortgage. The reason is simple: Especially early on, the vast majority of your regular monthly mortgage payment goes toward paying interest. But except in unusual circumstances, your lender should apply any extra money you pay toward reducing your principal. That reduces the amount of interest you'll pay throughout the remaining term of your mortgage, creating a cascading savings effect that has a much larger impact than you'd think.

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A simple example shows just how powerful small additions can be. If you have a 30-year mortgage for $250,000 at a 5% interest rate, then your monthly payment will be $1,342. If you add just $25 to each of your payments, you'll pay off your mortgage 14 months earlier, and you'll save more than $11,000 in interest by doing so. That's a huge savings just for paying down your mortgage by a tiny amount.

2. Downsize to a less expensive home
As you approach retirement, you might have made substantial progress toward getting your mortgage paid off, having built up a fair amount of equity. Meanwhile, as many homeowners enter the last years of their careers, they often have less need for a large home as children grow up and move away. If you're in that situation, then downsizing in favor of a smaller, more affordable home can put you in a position to live out the rest of your life free of mortgage debt.

For instance, if you originally bought a $500,000 home and have made payments on a 30-year mortgage for 20 years, then your remaining principal balance at that point will be just over $250,000. If you sell your home and get $500,000 for it, then you'll end up with $250,000 in your pocket after paying off your mortgage. That could well be enough for you to buy a smaller home -- while simultaneously freeing up almost $2,700 in monthly mortgage payments that you can divert toward better ends like saving for retirement.

3. Refinance your existing mortgage to get more favorable terms
Perhaps the easiest way for you to pay off your mortgage faster is to refinance in order to get lower interest rates or other more favorable loan provisions. Surprisingly, even though mortgage rates fell to multidecade lows during the financial crisis, many homeowners never took advantage of those rates to refinance and lower their monthly payments. Rates have climbed somewhat, but it's still not too late to take steps to obtain better mortgage-loan terms and accelerate the paydown of your debt.

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As an example, take the same $250,000 mortgage at 5% from the first example above. If you can refinance that loan and get a 4% rate, your monthly payment will fall by almost $150. You can pocket that money to use for other purposes, but if you choose instead to apply it toward reducing your principal balance, you'll find that it will help you get your mortgage paid off almost six years early, saving you nearly $39,000 in interest along the way.

Even those homeowners who are still underwater on their mortgages from the financial crisis can get relief. The Home Affordable Refinance Program is a government program specifically designed to help those whose homes have fallen in value get the refinancing they need in order to cut their monthly expenses. If you have a loan from before 2009 that was purchased by Fannie Mae (FNMA -8.97%) or Freddie Mac (FMCC -5.38%), then you can qualify for reductions in your interest rate, a shorter loan, or a fixed-rate mortgage to replace an adjustable-rate or interest-only mortgage or a home loan with ballooning reset provisions. If your current lender is an approved participating lender under the program, then you can get changes to an existing loan more easily. Moreover, for fixed-rate mortgages, there's no maximum loan-to-value percentage, allowing those who've responsibly paid their mortgages to refinance no matter how far the value of their home has declined.

Your home is a key part of your financial planning, and taking steps to eliminate home debt is one of the most important things you can do to shore up your finances. By following these three tips, you can get your mortgage paid off faster than you ever thought possible.