March 10th, 2017 By Kathi Russo in Blog
Let look at what a difference paying a little extra each month towards your mortgage payment can make. It’s called Compound Intrest. Albert Einstein called compound interest, “The Eighth Wonder of the World,” and putting extra toward your house payment works much the same way!
Let’s say you have a Mortgage Loan of $350,000 for 30 years at 4%. Your loan payment for principal and interest is $1,721.
Add $50/month toward principal changes your loan to 28.5 yrs & saves $15,558
Add $100/month toward Principal changes your loan to 27 years & saves $29,348
Add $200/month toward Principal-changes your loan to 24.5 yrs & saves $52.231
Add $300/month toward Principal-changes your loan to 22.5 yrs & saves $70,765
Add $400/month toward Principal-changes your loan to 20 yrs 10 months & saves $85,875
Did you notice how the numbers changed dramatically with each additional $100?
Don’t have the extra money. Look around. Are you stopping by Starbucks daily? That’s $3.75/day x 30=$112.50/month. If you eat at home and don’t go to a restaurant just one day more a week (@$20/meal) that’s $80/month. Pack lunches instead of eating out could be a savings of $40/week=$160/month. Getting a $1000-$3000 tax refund? Apply that to principal. Make a game out of it. See where you can cut costs or create that extra payment toward principal.
Want to find out how much you can save on your home? Call us today! (702)277-0075