Want to save thousands of dollars? Pay a few extra dollars on your mortgage each month and you could save enough money to buy a car! No, it’s not some kind of gimmick I’m trying to sell you, it’s just simple math. Take a $300,000 mortgage loan for example at 7% interest for a 30 year term. Your scheduled monthly payment would beÂ $1,995.91 and $1,750 of that is interest.Â If you keep the loan the full term only paying the normal scheduled payment you would pay $402,082.57 in interest!
Alright, I know what you’re thinking… Where is that free car you promised me? Well, pay $25 over each month on that loan and you will save about $16,444 enough money for a decent car. Oh yea and you will also finish up your loan a year early.
What? $16,000 isn’t enough for you to buy a new car? Well, pay $50 per month over on the loan an you will save yourself just over $38,000. Maybe not enough for a new Bentley, but more than enough for a nice car.
There are many third party companies that are willing to set up bi-weekly payment options or accelerated mortgage packagesÂ to help pay off your loan much earlier and save you thousands of dollars. Only problem I have with these programs is they usually charge you an up front fee somewhere between $50 and $100 to set the program up and then an additional $5 – $10 per payment to process each payment. All they are doing is forcing you to pay an extra payment every year so before you enroll try to do this yourself. It’s actually easier than you think. Get a bonus from work or a tax return and take of the extra payment and save those fees.
Paying any amount over on your monthly mortgage will save you thousands of dollars over the course of the loan. Before you buy that much needed “LCD” television think about paying an extra $1,000 on your home mortgage loan!