Everyone knows if you make extra payments on your mortgage, you can pay it off sooner, but, how much quicker do you pay it off by making the extra payments?
We have a calculator on our website which shows you how much quicker you can payoff the mortgage by making an extra payment.
Example: If you have a $200,000 mortgage and a 4% 30-year fixed mortgage rate, your monthly principal and interest payment is $954.83. However, if you paid an extra $100 per month, you could cut approx-imately 4 years off of the mortgage; if you paid an extra $200 per month, you could cut off approximately 7 ½ years off of the mortgage.
Many people like to set up bi-weekly payments with their lender where the mortgage payment is automatically drawn from their account every other week; lenders may assess a small charge for this service.
Alternatively, you can make one extra payment per year and it would have the same effect, i.e. 13 mortgage payments per year, either way, you save approximately 4 years on the mortgage.
By making the one extra payment per year, you may be able to avoid the small fee, and would have control over the payment. That is, you can choose when to make the extra payment rather than having a lender take the money out of your account. This also makes it easier to cancel, if needed.
If you are trying to payoff your mortgage quicker, and have questions, let us know.
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Counsel Mortgage Group®, LLC
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