I couldn’t resist sharing this with all my friends. Start making it a habit to pay more every month on your mortgage and save a lot of cash!
If you have a 30-year mortgage on your home like most people do, it may seem like forever until you own your home free and clear. This doesn’t have to be the case though, and by paying just a little more each month, the time until your mortgage is paid off can drop dramatically. In addition to the shorter payoff time, you’ll save yourself a ton of interest in the process, so maybe it’s worth spending a little more now to make your financial future much brighter.
A little extra can go a long way
Let’s consider an example of a new 30-year mortgage with a $200,000 balance. At an interest rate of 4.5%, your monthly principal and interest (P & I) payment would be $1,013. However, if you were smart and bought a home you can afford comfortably, there should be a little extra in your budget.
If you could afford even $50 extra per month, it would knock almost three years off the loan. $100 extra per month would shorten the mortgage to just 25 years. Higher payments would knock even more time off the loan.