We hope you have had a wonderful year and have lots to be thankful for. Saving money is a great way to round out the year. Here are some tips that might help…
- Start by adding in one extra payment every year.
Any additional payment you make is applied to the principal, not the interest. You will get your bill paid down sooner that way. Your balance will drop. You will not have to make interest payments on your principal for the remainder of your term.
For instance, Steven makes an extra payment each year of $2,000. Steven is going to save about $47,000 each year in interest payments. this allows Steven to get nearly five years of the loan reduced, and all he has to do is make one extra payment. Please note everyone’s situation s different, your results may be different. - Set up bi-weekly payments.
You can put half your payments into a separate account every other week. You use that money to pay. You will be making 26 payments at the end of the year, 13 full payments. You will have some extra money leftover you can apply to the principal. You can set up a payment plan yourself, or you can hire someone to do that. The service you hire might charge you. You will save about $47,000 each year, the same as the extra payment you made. - Do you have a PMI(Private Mortgage Insurance)?
Is your down payment less than 20%? You might have been required to sign one. You can have this taken away. If your mortgage is below 80% of your home’s appraisal, then you can have it canceled. Removing your PMI will cut hundreds off of your monthly payment. - Review your assessment.
Do you believe the value of your home has decreased in the last year? You can get a lower assessment. You need to talk to your tax advisor. The savings might be significant. You need to look up your local tax code and your home adjustment. You can save up to a few hundred dollars. - Reset your mortgage.
Are you making a large payment towards the principal? You can get your loan term reduced significantly. Your payments will still be the same. You need to speak to your lender. Some lenders will do that and some will not. If you pay %20,000 on the principal, you can save about $120 a month. You can save more as you pay more. - Modification eligibility possibility
Are you late for your payments? Are you facing a hardship? Your lender might work with you. You can get a reduction in the interest, as little as 2%. You can reduce your principal or extend the loan period.
Savings like these can add some extra money to your Thanksgiving spending.
Happy Thanksgiving!
