There’s nothing quite like the excitement of finding and buying your dream home. You found a home within your budget, set aside a down payment and found a mortgage at a stellar rate. But did you know over the course of that 30-year fixed-rate mortgage, you’ll end up paying almost as much in interest to the bank as you will toward the house itself? That is, unless you know how to beat the system.
Here’s the scenario: You take out a 30-year, $300,000 fixed-rate mortgage at 5% interest. That comes out to a monthly mortgage payment of $1,610.46 (not including taxes, insurance, and private mortgage insurance, if you need it). Sounds pretty reasonable, right? Not so fast. Make that payment 12 times a year for 30 years (360 times total) and you’re looking at a total of $531,451.80. Yes, over the life of your mortgage you’ll be paying more than $230,000 in interest alone. Ouch.
You may think, “OK, most of my $1,610.46 payment must at least go towards the principal, right?” Unfortunately not.
“The interesting part of amortization is that every mortgage payment [you pay each month], despite being equal, contains different amounts of principal and interest,” says Sam Fannin, residential mortgage loan originator at Premier Nationwide Lending in Dallas-Fort Worth, Texas.
In our mortgage example, your first payment looks like this: $1,250 interest + $360.46 principal. According to this amortization table, you’re paying more interest than principal until the 17th year of paying your mortgage.
So, in the last two minutes have you been thinking about all the things you’d rather do with that $279,770 than pay it to your bank in interest? Good, because you definitely can chip that amount down substantially. And here’s the sweet thing about it: You don’t even have to be a cash-rich millionaire OR have cash-rich millionaire parents! You just have to give your mortgage payments a little bit of thought. Here, three easy strategies to beat the interest game and save substantial amounts of money.
from https://www.apartmenttherapy.com/tips-to-save-money-on-mortgage-259505
from waaaay over here —> 3 Totally Doable Mortgage Hacks That Can Save You Thousands
from Sofia Consola
via 3 Totally Doable Mortgage Hacks That Can Save You Thousands
