Lowering Your Mortgage Term
February 3rd, 2009 | 
Author: Do you sometimes look at the number of years remaining on the term of your mortgage and feel as though there’s no end of payment in site? Or, do you calculate the total interest you will pay over that term, and dream about other things you can be doing that Money?
Should I lower my Mortgage term?
Lowering your term can save you years and tens of thousands of dollars over the life of the loan.
| Example: | $200,000 Mortgage 30 year term 6% interest $431,676 Total due over life of loan |
Monthly payment $1,199 |
| 15 year | $200,000 Mortgage 15 year term 5.5% interest rate $294,150 Total due over life of loan |
Monthly payment $1,634 |
The monthly payments are much lower on a 30 year fixed mortgage. But, because you make 180 more payments than a 15 year mortgage, your overall expense is $137,526 more on a 30 year term. There are certain times, when your monthly income has left you no choice but to choose the longer term with the higher overall expense, If this is the case then at least your monthly expenses are lower and you always have the option to send in higher payments above the minimum amount; by doing this your term will be shortened anyway (see Bi-Weekly Payment section)
Again, we just want you to be aware of more then just the monthly payments. We are trying to open your eyes and make you aware of the overall picture.
** Also read sections: Refinance My Mortgage, Debt Consolidation, Mortgage Rates and Credit Scores.
Posted in Lowering Your Mortgage Term
April 3rd, 2009 4:26 am
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