nevaehinvesting
Active Member
....here are a couple of money-saving words of advice:
1) If you can, try to pay a little extra a month on your loan. Make sure to tell the mortgage company to apply the extra money that you pay over the amount due, "to the principle." The interest that you pay is a function of the total principle balance. Here's an example:
Picture a 100K house, 7.5% interest rate, financed over a 30yr loan. The payments would be $699.22/month for 30yrs. That means you would have paid $251,719.20 for that 100K house.(this is how banks make money)
But let's say you were to pay $699.22/month and then an additional $75/month applied to the principle for a total of $774.22/month. That would bring your 'loan lenth' down to 22.08yrs as opposed to 30yrs. Also, instead of paying the 251K total that we figured above, your total after 22.08yrs would be $205,137.
Lets do the numbers for paying an additional $150/month. That 251K total would come down to $181,733.08 and the 30yr loan would now be 17.83yrs! That's almost cut in half.
I realize that everyone can't put extra money toward their mortgage payments EVERY month but if you can do it at least sometimes, it'll REALLY help you out financially. For y'alls next home, you may even want to plan to but a house that y'all can definitely do this with. If y'all can afford $850 a month for a mortgage payment, try to buy a house that will have monthly payments of $750 or $800 so that you can pay extra & save in the long run.
2) When you began to make mortgage payments on the house, try to pay on the loan every two weeks instead of once a month. For example, if your mortgage payment is $800/month then you would pay $400/2weeks for a total of $800 a month. This will also cut tens of thousands of dollars off of your loan over 30yrs.
Just some ideas & congradulations on your house!
,
nevaehinvesting
1) If you can, try to pay a little extra a month on your loan. Make sure to tell the mortgage company to apply the extra money that you pay over the amount due, "to the principle." The interest that you pay is a function of the total principle balance. Here's an example:
Picture a 100K house, 7.5% interest rate, financed over a 30yr loan. The payments would be $699.22/month for 30yrs. That means you would have paid $251,719.20 for that 100K house.(this is how banks make money)
But let's say you were to pay $699.22/month and then an additional $75/month applied to the principle for a total of $774.22/month. That would bring your 'loan lenth' down to 22.08yrs as opposed to 30yrs. Also, instead of paying the 251K total that we figured above, your total after 22.08yrs would be $205,137.
Lets do the numbers for paying an additional $150/month. That 251K total would come down to $181,733.08 and the 30yr loan would now be 17.83yrs! That's almost cut in half.
I realize that everyone can't put extra money toward their mortgage payments EVERY month but if you can do it at least sometimes, it'll REALLY help you out financially. For y'alls next home, you may even want to plan to but a house that y'all can definitely do this with. If y'all can afford $850 a month for a mortgage payment, try to buy a house that will have monthly payments of $750 or $800 so that you can pay extra & save in the long run.
2) When you began to make mortgage payments on the house, try to pay on the loan every two weeks instead of once a month. For example, if your mortgage payment is $800/month then you would pay $400/2weeks for a total of $800 a month. This will also cut tens of thousands of dollars off of your loan over 30yrs.
Just some ideas & congradulations on your house!
,
nevaehinvesting
