Sunday, October 3, 2010

Want to save money? I mean BIG money

Stop what you are doing,


Right Now...  find your last mortgage statement.

Now take a much money are you paying in principle?? 
Now, how much are you paying in INTEREST! (YIKES) 
I know it's horrible isn't it!!

Let's say you owe $200,000 on your principle balance at 6% interest rate with a 30 year fixed loan.

If you never make an extra principle payment you will be paying an extra $231,677.05 in interest.    That doesn't sound like 6% to me, it sounds like 130%.

That home you thought you were paying $200,000 for is really costing you 431,677.05

Did you know you can do something about it?  
You can pay down your principle balance and decrease the amount you pay in interest.  

Now let's say you don't have a lot extra cash to add to that principle balance only $100 additional a month. 
 Over the next 30 years you will have saved $62,463.88 in interest and decreased then length of you loan by 9 years 10 months.
Isn't that ridiculous, everyone tells you 6% is a great rate, but really is it?  
There is a great calculator online that can show you how much you can save by prepaying your mortgage principle.

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