For many home owners, mortgage payments are their largest monthly expense. Fortunately, there are ways to decrease your monthly payment and pay off your loan faster. Keep in mind, these are merely suggestions and may not work for every homeowner. Talk to your mortgage consultant or financial adviser before committing to any of these practices.
For illustrative purposes, let’s use this imaginary 30 year fixed rate mortgage as an example:
Mortgage amount: $200,000
Term: 30 years
Rate: Fixed, 5%
Estimated monthly P & I payment: $1,073.64
Make one extra payment a year
If you are able, make one additional, full mortgage payment a year. Be sure this extra payment is going toward your principal balance, not your interest. Depending on your loan terms, you may need to request that the money be put toward principal. [Read more…]