How to pay a lot on your mortgage can save you money

It's the American dream to own your own home and dreamers will go to any lengths to achieve, even if it means thousands of dollars to pay back the loan over a 30 year period. It's quite a commitment to make 360 ​​payments month after month with most of the money goes towards the interest, at least at first.

The interest can be for the average house in a 30-year period to explain about twice the cost of the house. The interest working against you 24/7/365. It would be great if you could pay off your debt sooner and save thousands of dollars a year?

You can. It only takes discipline and perhaps a little adjustment on the budget. It is no secret that your mortgage will be paid twice a month, instead of just once to save you thousands and pay off your debt earlier this year. Some call the biweekly mortgage plan.

For example: Let's say you pay $ 80,000 for your home and borrowed at 7% for 30 years. If you divide the payment in half and paid every two weeks should save $ 25,000 in interest and reduce the duration of 8 years.

Not bad for a little extra work. Of course, the longer the loan and the interest, the more you save. You'll pay less interest and more for the Lord. Additional payments to reduce the principal and interest faster.

You just create a short-term mortgage in principle concluded the same thing? Basically yes. But many people can not qualify for a shorter mortgage term because of higher payments. The bi-weekly schedule, you can take control of yourself and enjoy flexibility.

There are many companies that do this for you for a fee of $ 100 to $ 400. Or, some will be free, but charge transaction fee each time you make a payment.

You can do it yourself, but talk to your lender and read the fine print in your contract. You can have a pre-payment penalty to pay off the loan ahead of time. A few lenders also tack on a service fee every time you make an additional payment.

Banks can also provide you with biweekly calculator to let you decide how much you can save and how soon to hold your home really. You should also save the private mortgage insurance (PMI) to repay the loan early.

By paying bi-weekly, actually pay more than one time payment and makes the difference. You can accomplish the same thing with an additional payment whenever you any amount. When you do this, write a check with a note stating that the money should be applied to the principal and not the interest.

Most financial institutions are willing to help you save money on your mortgage, but it is up to you to get the economic ball rolling. For months because of the cost of dinner and a movie for you and your family all you can be debt free years sooner and save thousands of dollars.