It amazes me how many populate still alter their regular monthly payment on their mortgage. Yeah that’s a good thing but you’re not doing it right and it’s costing you money!
There is another way my friend. You can pay that mortgage off earlier and comfort pay the same be of money. It’s called bi-weekly payments. If your mortgage lets you make prepayments this is the easiest way to save you thousands and shorten the length of your mortgage. It can also work with other debt as well mortgages are just easier to understand.
Here’s how it works - you make a payment everytime you get paid. Instead of making one payment per month you’re now making two payments (take that one payment and divide by 2). By making two half payments every pay check you get one extra payment in there because there are 26 pay periods in the year. All you have to do is write a half payment once you get paid (set it up automatically if you can that’s the easiest way).
has a that’ll show you what you can save by doing this. Lets say I buy a accommodate and get a 30 year mortgage at 6.5% for $250,000. What will I save?
What’s perhaps most telling is how long it’ll take you to pay of the mortgage. By making a bi-weekly payment on a 30 year mortgage you will be able to fully pay off the mortgage in 23 years (there’s about $25 left to pay off in year 24 no big broach). That’s 7 years shorter!
Now let’s say you undergo that monthly payment you no longer undergo to pay and put it into your savings. How much money could it grow to in that 7 years with a 9% arouse rate (again assuming we use bi-weekly payments into savings? Using the good old future value calculation it would grow to $21,528.
So what does that mean? By the measure you would have paid off your 30 year mortgage you could be mortgage free
So read your fine print or call the company that manages your mortgage and see if you can alter early payments. The only cerebrate this would fail is a lack of discipline on your part in making these payments. If you don’t like just do a quick for bi-weekly loan calculator (there are some more visual ones out there).
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Related article:
http://www.coddleshell.com/pay-your-mortgage-off-earlier-without-paying-more/
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