| Taking a mortgage on your home is the largest and | | | | this monthly payment, you can repay the mortgage in |
| the longest debt that you will take in your life. However, | | | | 20 years and nine months with a huge saving of |
| investing in a house is a necessity, so you must be | | | | $82,000 in interest. This is because your additional |
| smart and try to see how you can save by paying | | | | amount goes towards repayment of the principal. The |
| more on your monthly mortgage payments. Your | | | | $100 you pay in the first month would actually be $270 |
| mortgage statement should show the amount repaid | | | | with interest. The next month you save $268 and so |
| towards principal and interest. Calculate how much | | | | on. So you save about ten years and more than |
| extra you can afford to add to your monthly | | | | eighty thousand dollars in interest by just making an |
| installment based on your income and expenditure. | | | | additional payment of $1200 a year. |
| Why should you want to know about savings on your | | | | Additional points to consider when increasing the |
| mortgage payments? | | | | monthly mortgage repayment amount. |
| Its really as simple as controlling the future of your | | | | - Ensure that the additional amount goes towards |
| finances and saving thousands of dollars towards | | | | repayment of the principal amount. Your lender is quite |
| interest payments every year. You may never have | | | | likely to add it to the interest amount due for the next |
| enough finances to pay off the mortgage right away, | | | | monthly installment. |
| or enough equity in your home to opt for a refinance. | | | | - The lender may apply only a small amount as |
| But you can make additional payments to reduce the | | | | repayment of principal and deduct the rest as service |
| accruing interest on your mortgage. This is important | | | | charge. To avoid any such mistakes send a separate |
| because interest payments over the life of the | | | | check with precise instructions stating that the |
| mortgage amount to nearly twice the value of the | | | | additional amount is repayment of the principal. |
| home. You must realize that the mortgage accrues | | | | - Check to see that the lender has no penalties for |
| interest every day and your lender has a vested | | | | early repayment. |
| interest in a long-term mortgage. So you be wiser and | | | | - Enquire if you can make bi-weekly payments instead |
| add just $50, $100 or $500 depending on your monthly | | | | of a lumpsum monthly payment. Ignore this option in |
| budget, towards paying off the principal amount of | | | | case the processing fee is high. |
| your mortgage. | | | | How not knowing about this saving can hurt you |
| How can a mortgage calculator help you calculate the | | | | The mortgage calculator helps you automatically |
| savings on your monthly mortgage payments? | | | | calculate the interest savings in pre-paying the |
| You will usually take a 15 year or a 30 year mortgage. | | | | mortgage. You simply enter the additional payment |
| Manually calculating the savings every month of this | | | | you will make each month and the time from which |
| long tenure is tiring and you are bound to make errors. | | | | you will do so. The calculator will give you a |
| Instead it is better to use an additional payment | | | | comparison of the savings in interest instantly. |
| mortgage calculator available at several financial | | | | Moreover, you can start by just adding $100 to your |
| websites for the same. | | | | monthly installment and still benefit. However, ignorance |
| Example | | | | of this fact means that you carry the interest burden |
| For example, for a loan amount of $120,000 with a 30 | | | | for a longer time and waste money that can be better |
| year mortgage, the monthly mortgage repayment at | | | | used elsewhere. |
| 9% works out to be $733.76. If you simply add $100 to | | | | |