![\"Beautiful](\"http:\/\/www.mikeclover.com\/blog\/wp-content\/uploads\/2017\/02\/iStock-541602366-300x200.jpg\")
<\/a><\/p>\nIf you\u2019re like two-thirds of American homeowners, you got a mortgage loan to finance the purchase of your home. For many, it\u2019s a 30-year commitment. Wouldn\u2019t you love to reduce that to 20 years \u2013 or even 15 years?<\/p>\n
If there\u2019s any extra money in your budget, there are some simple ways to do just that.<\/p>\n
First, remember that every dollar you pay on the principal reduces the amount of interest you pay. That\u2019s why with each payment you make, the amount going to pay down the principal rises slightly while the amount paid in interest decreases slightly. In the early years of a mortgage loan, twice as much will go to interest as to principal. That means making extra payments in the early years will greatly reduce both the interest you pay and the number of years you pay.<\/p>\n
Pay a little more now to pay far less later<\/strong><\/p>\n\n- Make one extra payment per quarter to pay off your loan in 19 years.<\/li>\n
- Make 1\/12 of an extra payment per month or pay bi-weekly rather than monthly to add one extra payment per year, and shave four years off your mortgage.<\/li>\n
- Look at your statement and see how much of your last payment went to pay down the principal. Can you add that amount to your monthly payment? If so, you\u2019ll effectively be making two payments per month.<\/li>\n
- Round up each payment so you\u2019re paying even a few dollars extra per month \u2013 it all adds up.<\/li>\n
- Make an extra payment or increase your payment any time you get a raise or a bonus.<\/li>\n
- Pretend you\u2019ve refinanced. If you\u2019ve got a low interest rate on a 30-year mortgage, ask your mortgage lender to calculate the payment as if you had a 15-year mortgage. Then pay that amount each month.<\/li>\n<\/ul>\n
If you have a $200,000 30-year mortgage at 4%, your principal and interest payments are $954.83. If you decided to pay it off in 15 years instead, the payment would be $1,479.38. If you have the discipline to do it, this is a better option than an actual refinance, because you won\u2019t pay any loan fees \u2013 and if you have an emergency that cuts into your finances, you won\u2019t be obligated to make the higher payment.<\/p>\n
If you now have a 15-year mortgage, find out what you\u2019d need to pay monthly to cut it down to 10 years.<\/p>\n
One caution:<\/strong> Check with your mortgage company to make sure they will accept extra payments \u2013 and that they won\u2019t impose a prepayment penalty. Make sure any extra funds you send will be applied to the current principal and not to the next month\u2019s payment.<\/p>\nIf your interest rate is a bit high, a refinance is a good idea.<\/strong><\/p>\nBut do check the facts and do the calculations. A refinance does come with loan fees, so if you plan to sell the house in the next 2 or 3 years, it may be of no benefit to you. Check with your lender to learn the costs, along with the new interest rate and payment.<\/p>\n
Once you\u2019ve refinanced, keep paying the same payment you\u2019re making now. Depending upon the interest rates involved, it can cut years off your loan.<\/p>\n
If you really, really don\u2019t want to make house payments\u2026<\/strong><\/p>\nConsider downsizing. Sell your larger home and use the profits to buy a smaller, less expensive home. You may be able to pay all cash, or take out a small loan and pay it off quickly by continuing to make the payments you\u2019ve been making on your more expensive home.<\/p>\n
Whether you\u2019d like to refinance or just want to know how a larger payment would affect the number of years you\u2019ll be paying for your home, give us a call. We at Homewood Mortgage, the Mike Clover Group, will be happy to help.<\/p>\n
Call us at<\/strong> 1-800-223-7409.<\/strong><\/p>\n![\"mike-clover-group-email-signature-muy-grande\"](\"http:\/\/www.mikeclover.com\/blog\/wp-content\/uploads\/2016\/10\/Mike-Clover-Group-Email-Signature-muy-grande-300x183.jpg\")
<\/a><\/p>\nMortgage Banker<\/p>\n
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Homewood Mortgage,LLC<\/p>\n
O: 469.621.8484<\/p>\n
C: 469.438.5587<\/p>\n
F: 972.767.4370<\/p>\n
18170 Dallas Parkway<\/p>\n
Ste. 304<\/p>\n
Dallas, TX 75287<\/p>\n
NMLS# 234770<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
If you\u2019re like two-thirds of American homeowners, you got a mortgage loan to finance the purchase of your home. For many, it\u2019s a 30-year commitment. Wouldn\u2019t you love to reduce that to 20 years \u2013 or even 15 years? … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/posts\/589"}],"collection":[{"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/comments?post=589"}],"version-history":[{"count":1,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/posts\/589\/revisions"}],"predecessor-version":[{"id":591,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/posts\/589\/revisions\/591"}],"wp:attachment":[{"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/media?parent=589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/categories?post=589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mikeclover.com\/blog\/wp-json\/wp\/v2\/tags?post=589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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