I'm
sure that you've heard that you could save big money by paying more on your
mortgage every month, right? By paying just a little bit extra every month you
could save thousands in the long run. Also, there are 15 year mortgages where
you could pay off your home in half the time and save a bundle. But, just how
much can you save? Let's look at some numbers.
Suppose you have a $100,000 mortgage at an 8% interest rate. Now, if you pay
it off using the traditional 30 years, you will have paid out a total of
$264,155.25 to your mortgage in easy monthly installments of $733.76. However,
if you could come up with just an extra $222 a month you could pay off your
home in half the time, saving you over $90,000! That's quite a savings!
Now,
something that we hear a lot is, "Where the heck am I supposed to get an extra
$200 a month!?" Easier said than done? Not usually. If you don't have the
extra funds already, is there somewhere you could cut back on your expenses
on? Many people easily spend over $200 eating out each month.
Perhaps you or your spouse could get an extra part-time job an evening or two
a week or on the weekends. How much extra would you have to work to earn an
extra couple of hundred dollars? At just about $50 a week extra you could
easily pick that up delivering pizzas, selling homemade crafts, getting rid of
unwanted/unneeded items on eBay, or waiting tables on a busy Friday or
Saturday night.
Yes,
the job itself may not pay much, but look at what you'll be saving in the long
run. Working a part-time job for $50 dollars a week will earn you $39,000 over
the 15 years of your mortgage. Now, add in the $92,000 that you are going to
save on your mortgage and you are now looking a pretty high paying part-time
job!
Want
to calculate your own savings? We've included a simple mortgage calculator
below so that you can see just how much you can save on your own mortgage
loan. Simply enter your interest rate, total number of payments (360 for 30
years, 180 for 15 years), and the amount to be financed in the light grey
cells and find out how much you are really paying for your mortgage.
