Homeowners can save money by paying off mortgage early
Jan 16 2012 6:21PM
While many homeowners continue to make their scheduled monthly mortgage payments, The Associated Press reports paying their loan off early will save money over time. An early payoff of a 15 or 30-year loans can cut out added interest and save homeowners money.
If homeowners are looking into paying off their mortgage early, one financial advisor told the source to simply add a little extra to the monthly payments already made. Additional payments should range between $50 to $500 dollars, but the source says families should be careful where they pull the extra money from, as other necessities shouldn't be sacrificed. The AP also suggests simply adding an extra mortgage payment each year.
According to the source, homeowners may want to change their monthly payment into a payment every two weeks, which would result in 26 half payments versus 12 full payments for the year, cutting roughly six years off of a 30-year mortgage loan.
The AP says that homeowners may also chose to put any large sums of money including gifts, inheritances, bonuses or income tax refunds toward their mortgage, but recommends paying off any other debts that may have a higher interest rate first.