As promised, here are some invaluable tricks that help you to pay out quickly your home mortgage and save a lot of money.
Pay slightly higher home mortgage payments
If we take the same example as in the previous article but it increase monthly payments to $900, we get good results! The magic result? You will pay off your mortgage ever approximately 21 years instead of 25!
It also means you will save four years of interest. How much? At least $24,500! So, how couldn’t you pay $70 more per month: this is only $2.50 per day and means a lot of savings on your home mortgage!
Increase the frequency of your payments
The example we talked about takes into account you pay your home mortgage every month. Why not try to pay every two weeks, or even better, every week?
This simple change in the management of your budget will help you pay even less interest. If you pay every two weeks, you will own your home after only 18 years! This simple trick makes you save more than $44,000! This just by changing the frequency of your payments!
Additional payments on your home mortgage (every year)
This is the third and maybe the most powerful trick to pay your home faster! Did you know your bank certainly allow you to make an additional payment of 10% (or more) of the amount you owe? Check with your bank to be sure and, if you are going to take a home mortgage or refinancing, this could be a good thing to check before to sign.
If you do not ask your bank to pay a percentage on your home mortgage, your bank certainly not reminds you this possibility… What is beautiful with this trick is that the amount you pay every year go directly to repayment of capital.
If you use this option, you will reduce extraordinarily quickly your home mortgage. For example, if you decide to pay only $1,000 per year for 5 years with two tricks we talked about, you will reduce your amortization period to 17 years. This means you will save more than $ 55,000 of interest! Image if you pay more than $1,000 each year!
And don’t forget, you can use more than one trick at time to add up your savings!
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