Even though you already have a mortgage on your property you can still make adjustments that could save you thousands of dollars. It is very simple, and you don’t have to ask anybody for permission to do it. You just set up a system of your regular payments to go from once a month, very expensive, to every two weeks.
The purpose is to make 26 payments a year rather than 24. A draw back to this is that there will be 2 months of the year when you will have an extra payment of exactly the same as all your other payments. But the savings are worth the extra payments. The savings are always interest costs and all of the money goes to the principle of the loan.
Here are two examples of the possible savings you can realize.
#1 You have a mortgage of $200.000 at 6% interest with 360 months to go before it is paid off. Your current monthly payment is 1194.18.
Here is the first example showing the type of savings of this adjustment, and in each case, you pay off your mortgage in 27.5 years rather than 30 years, saving 2.5 years of payments.
Loan Amount | Interest Rate | Monthly Pymt | Total Interest | # of Months |
$200,000 | 6% | $1,198.18 | $231,676.38 | 360 |
OR | ||||
$200,000 | 6% | $1,238.91 | $208,841.44 | 330 |
+$33.73 (extra Monthly) | -$22,774.92 (Savings) |
The $33.73 dollar additional payment will also all go to the principle of the loan.
This would also provide you 2.5 years of no payments which will save you $35,975.40. Together with the other interest savings could provide you with a total interest saving of $58,752.32.
#2 You have a mortgage of $300,000 at 6% interest with 360 months to go before it is paid off. Your current monthly payment is $1,798.50.
Loan Amount | Interest Rate | Monthly Pymt | Total Interest | # of Months |
$300,000 | 6% | $1,798.50 | $347,514.57 | 360 |
OR | ||||
$300,000 | 6% | $1,858.37 | $313,262.15 | 330 |
+$60.87 (extra Monthly) | -$34,251.42 (Savings) |
The $60.87 additional payment will also all go to the principle of the loan.
This would also provide you 2.5 years of no payments which will save you $63,955. Together with the other interest savings could provide you with a total interest saving of $98,206.42.
The additional payments in both cases all go straight to the principle, none to the interest. All of the savings are reduced interest costs in one way or the other. The original price of the home is not affected it is the amount of interest you pay that is reduced. The interest payments you make are all kept by the bank and this is another way the banking system takes your money.
This can be done at any time during the mortgage just be changing the payment schedule.
There is one item that must apply to your mortgage payment. Interest must be computed daily. Almost all credit unions charge interest daily. Most banks do not. An additional way the banks steal our wealth. So far, the credit unions are more on our side than the banks.
Note: I am not a financial advisor. You must check everything out for yourself to insure you understand what is happening.
All care is taken in the preparation of the information and published materials in this document. Provis Enterprises, Inc. does not make any representations or give any warranties about its accuracy, reliability, completeness or suitability for any particular purpose. To the extent permissible by law, Provis Enterprises, Inc. will not be liable for any expenses, losses, damages (including indirect or consequential damages) or costs which might be incurred as a result of the information being inaccurate or incomplete in anyway and for any reason.
This document may contain hypertext links, frames or other references to other parties and their documents. Provis Enterprises, Inc. cannot control the contents of those other documents, and makes no warranty about the accuracy, timeliness or subject matter of the material located in those documents. Provis Enterprises, Inc. does not necessarily approve of, endorse, or sponsor any content or material in such documents. Provis Enterprises, Inc. makes no warranties or representations that material in other documents to which this document refers does not infringe the intellectual property rights of any person anywhere in the world.
If you have any concerns regarding the content of this document please contact Provis Enterprises, Inc.