![]() Using the early mortgage payoff calculator we can see that if you added just $67.13 per month to your house payment (roughly the cost of a designer cup of coffee per workday), you could pay off your home loan in 25 years and save $33,821.65 in interest charges in the process. ![]() If you have a $150,000 home loan, financed at 6% for 30 years, your monthly payment would be $899.33. If so, you may be shocked to learn that if you brought a thermos from home and applied the daily cost of a cup of coffee to your mortgage, you could pay off your mortgage 5-years ahead of schedule and save $30,000 in interest charges. How a Coffee Habit Can Cost You $33,000, or More!Īre you one of those people who have a habit of purchasing one or more $3.00 cups of designer coffee (flavored water) each day? If so, your prepayments will likely be better invested elsewhere. ![]() Mortgage Company Escrows Your PrepaymentsĬheck to make sure your mortgage company doesn't simply escrow your prepayments (applying them at the end of the loan term) instead of applying them to the balance when they are made. Believe it or not, there are mortgage companies out there that will fine you for cutting into their forecasted profit margins - despite the fact that they will still make a fortune off your home loan. Mortgage Company Penalizes You for Prepaymentsīe sure to check with your mortgage company to make sure you can prepay your mortgage without penalty. So be sure to check with a qualified financial planner (one who will not be making commissions off of your investments, and who is not trying to sell you life insurance) before starting your accelerated mortgage payoff plan. If your employer matches all or part of your 401K contributions, you may be better off contributing the extra payments to your 401K. If you have other debts that have a higher interest rate than your mortgage, you will save a lot more money if you pay off the higher-interest debt first, and then redirect those higher-interest debt payments to paying off your mortgage. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.Don't Lose Money On Your Early Mortgage Payoff Planīefore starting an early mortgage payoff plan please consider the following cases where it may end up costing you money instead of saving you money. Banzai and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Banzai and its sponsoring partners from any such liability. Neither Banzai nor its sponsoring partners make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Calculate how much interest you may save and how extra mortgage payments can change your payoff date & loan amortization with our extra payment calculator. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. While we hope you find this content useful, it is only intended to serve as a starting point.
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