Want to Save $50,000 + on your Mortgage and have it paid off 8 years earlier.
Read the following steps below and test out the early mortgage payoff calculator to the right to find out how. Click on Amortization Schedule to see all of your payments.
Aside from the peace of mind of owning your home outright, paying off your mortgage sooner can make sound financial sense by saving you thousands of dollars in interest costs. It's as simple as these 3 steps.
Set up with your mortgage lender Bi-Weekly payments. This will save you tens of thousand on your mortgage and have your house paid off 4 years earlier on a 30 year mortgage. Some people setup bi-weekly payments directly with their banks; however, most mortgage companys just hold on to that partial payment until they receive a full payment, then they apply that amount to the payment which does nothing to the principal balance.
Make an annual lump sum payment: Use your tax refund or a windfall such as an inheritance or work bonus, and apply it directly to your principal. This could save you $50,000 + on your mortgage and have your home paid off in 22 years on a 30 year loan. Make sure that you either send them a seperate check in the mail and write to Princial Reduction on the check; otherwise they might just apply it towards a regular payment and again this does you no good.
Red flag your extra payments: It's always important to make sure your payments are being handled properly and make sure your principal is being reduce properly.
Play around with the mortgage calculator to the right and see how much money you could save in interest!