Did you know that paying one extra mortgage payment per year could significantly reduce the amount of interest you pay over the life of the loan? So many say, “But I can’t afford an entire extra payment, even if it’s only once a year.” Well, the good news is, you don’t have to pay it all at once. That’s right! The easiest way to go about this, is to take your current mortgage payment, divide it by 12 (months) and add that much extra to your payment every month. For example, if your current monthly house payment is $1,200, divide this by 12 ($1200/12= $100). Your new house payment would be $1,300 ($1200+$100 extra principle). By the end of the year, you have made an entire extra mortgage payment, and it doesn’t hurt as much!
Another way would be to round up your mortgage payments. If your payment is $1,245, then try to pay $1,300. It may not seem like much, but remember: when it comes to paying your mortgage off early, EVERY dollar counts!
You could also use unexpected income. If you receive an unforeseen bonus, or raise, try to apply it to the principal. But only if you can afford it, of course!
Remember, your house purchase will be the BIGGEST investment of your life. What better way to appreciate your home, than to have a paid off mortgage early on? Just doing any of these above tips, could save you THOUSANDS of dollars in interest. That’s THOUSANDS of dollars back in your pocket to invest, save, or vacation on.