Sure, a 15-year mortgage will come with a bigger monthly payment. Use the mortgage payoff calculator and see how fast you can pay off your home! But if you switch to a 15-year mortgage with a lower interest rate, you’ll save almost $100,000-and you’ll pay off your home in half the time! If you keep the 30-year mortgage, you’ll pay more than $158,000 in total interest over the life of the loan. Let’s see how this would impact our earlier example. Based on our example, you’ll pay your mortgage off a year early, saving over $6,000 in the process.Īnother way to pay off your mortgage early is to trade it in for a better loan with a lower interest rate and a shorter term-like a 15-year fixed-rate mortgage. Put Andrew Jackson to work for you by adding just $20 to your mortgage payment each month. Even small sacrifices can go a long way to help pay off your mortgage early. Based on our example above of the $220,000 loan, that $100 in lunch money will help you pay off your mortgage almost five years ahead of schedule and save you over $27,000 in interest!Ĭan’t quite spare a whole $100 from your food budget? No worries. Suppose packing your lunch frees up $100 to use toward your mortgage every month. But trading lunch out for eating in can make you a lean, mean, mortgage-free machine. Sure, bringing a peanut butter and jelly sandwich to work every day isn’t as fun as going to a restaurant with your coworkers. So if your lender only lets you pay biweekly by charging you a fee, don’t sign up. The real reason it helps pay off your mortgage faster is because your extra payments add up to 13 monthly payments per year instead of the standard 12. Remember, there’s nothing magical about them. Based on our example above, that extra payment can knock four years off a 30-year mortgage and save you over $25,000 in interest.Īre biweekly mortgage payments a good idea?Ī biweekly payment plan can be a good idea-but never pay extra fees to sign up for one. That results in 26 half-payments, which equals 13 full monthly payments each year. This means you can make half of your mortgage payment every two weeks. Some mortgage lenders allow you to sign up for biweekly mortgage payments. What does paying your mortgage biweekly do? You can accomplish the same goal all by yourself. Don’t shell out your hard-earned cash for a fancy-schmancy mortgage accelerator program.Include a note on your extra payment that you want it applied to the principal balance-not to the following month’s payment.Some companies only accept extra payments at specific times or may charge prepayment penalties. Check with your mortgage company first.Our mortgage payoff calculator can show you how making an extra house payment ($1,050) every quarter will get your mortgage paid off 11 years early and save you more than $65,000 in interest- cha-ching!īut before you start making extra payments, let’s go over some ground rules: Let’s say you have a $220,000, 30-year mortgage with a 4% interest rate. To get serious about paying off your mortgage faster, here are some ideas to help: And that means if you add just one extra payment per year, you’ll knock years off the term of your mortgage-plus save thousands of dollars in interest. Okay, you probably already know that every dollar you add to your mortgage payment puts a bigger dent in your principal balance. We’ll show you how to pay off your mortgage faster so you can finally join the ranks of debt-free homeowners. How can you pay off your mortgage early?ĭon’t worry. And paying off your mortgage early lets you supercharge your retirement savings.īut the problem is you’re currently stuck dragging around that ball and chain called a mortgage-just like most homeowners. When the bank doesn’t own your house and you step onto your lawn, the grass feels different under your feet. So you’re eager to pay off your mortgage early and join the nearly 40% of American homeowners who actually own their home outright.
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