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| Hypotheque - Save Big Bucks on Your Mortgage |
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Do you realize that you can save tens of thousands of dollars on your mortgage by paying the same exact amount on it every month? Not many people realize how effortless this can be.
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Do you realize that you can save tens of thousands of dollars on your mortgage by paying the same exact amount on it every month? Not many people realize how effortless this can be. We get paid each two weeks, usually. As we all know, things are much easier in the beginning of these two weeks than at the end. And yet, we still spend the same amount every week. But we spend the bulk of our money early in the period and then struggle at the end. The answer to this dilemma is to budget our money, and one of the most valuable and easiest ways to do this is to pay your home loan (pret hypothecaire) every two weeks instead of once a month. This simple trick saves thousands of dollars for home owners, and will pay off a mortgage (hypotheque) more quickly as well. Let us use an example of an $80,000 fixed, 30 yr, 7% mortgage-about $25,000 may be saved on such a mortgage using this system. Merely pay one half of your mortgage at the outset of the month, and one half at the end, instead of all at the end. (This is what most people do, in order to make the beginning of the month due date.) There is no real mystery to this: as you pay your mortgage earlier and earlier, you bring forward the eventual due date of the loan.
Because of this, your total interest payments are less. Because of the way mortgage interest is calculated and paid down, most of your initial mortgage payments are allocated to pay interest, and only a small part goes to principal. So you mostly pay interest, at least at the outset of the loan. The faster you make those interest payments, the faster you will start to substantially reduce the principal. This means that your total home loan will actually be paid up earlier! You may be able to obtain forms to make this additional payment, but if not, just send the additional check in with your account number on it. You might even consider making additional copies of your mortgage payment coupons and just changing the date on them. You pay exactly the same amount on your home loan (pret hypothecaire) each month, but because you pay half of it ahead each month, you reap the dual benefit of saving tens of thousands of dollars in interest, and you will pay your mortgage down earlier. About the Author: David is the developer of Article Post Robot, which can post articles to hundreds of article sites and mail lists automatically. http://www.articlepostrobot.com . Users can request a demo by sending an email to help(at)articlepostrobot.com . David also has a directory submission service
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Posted on Dec 29, 2008 15:04pm by admin
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