Posted On: December 28, 2016 by Exchange Bank of Northeast Missouri in: Mortgages Personal Finances Save Money
If the sound of savings makes your ears perk up, Exchange Bank of Northeast Missouri has the perfect New Year’s resolution for you! As a homeowner, you have a unique opportunity to lessen your debt while also building home equity.
As of October 2016, the median price for an existing home in the United States was $232,000. This being said, a potential monthly mortgage payment for this home value could be approximately $873.51 for the average new home owner. While homeownership is certainly a milestone in your personal finances, there are some things you can do in order to pay less over the duration of your loan. Did you know that for this mortgage amount, you could pay up to $185,000 in interest alone? To shorten your repayment period, and decrease the amount you pay in interest, there are three primary things you can do:
- Pay more than your minimum payment. Typically, when you pay additional money towards your mortgage, you can then choose if it goes towards your principal or the accumulated interest. By paying down your principal, you will have a lesser balance for potential interest. This helps to pay off your loan sooner, while also decreasing the amount in interest you owe over the course of your loan.
- Make more frequent payments. Additionally, by increasing the frequency of your payments, you can chip away more at the base of your mortgage. Even if the extra payments don’t meet the same amount of a full payment, it still helps to decrease your overall loan. This also helps to decrease your potential interest expense.
- Refinance. Loan rates have a habit of changing over the course of a fifteen or thirty-year mortgage. If you see an opportunity to save additional funds by refinancing your home loan, it could save you thousands in the long run.
By committing to these three tactics, you can shave both years and money off your current home loan. If you’re looking to purchase your first home, be sure to stop in and speak with one of our experienced mortgage lenders.
Exchange Bank of Northeast Missouri
Member FDIC
Equal Housing Lender
NMLS #483241