Shortening Mortgage Pmts
My husband & I have 23 yrs left on our mortgage. We've responded to an advertisement that stated that they can teach us how to pay off the mortgage in 10 yrs by applying funds against mortgage interest, we also have to create an equity line for this to work. How is this possible? Company name is Tardus Financial
Nina
Ok here's how, and it is going to cost you NOTHING.
DO NOT PAY SOMEONE FOR THIS INFORMATION.
Your loan is amortized over a 30 year period. You are making huge interest payments and very small principal payments.
To illustrate:
You make an extra payment every month of $100 dollars toward principal. This will reduce the interest paid overall.
Alternatively, you start making bi-weekly payments: That is 26 payments a year instead of 24 and you include extra cash to cover the principal
Here is a website on how to calculate:
http://www.interest.com/hugh/calc/mort.html
I know its a rudimentary explanation, if you need more, just ask...
Good Luck,
Clint[ Edited by cmiller2 on Date 10/27/2003 ]
The cheapest and easiest way to pay off a mortgage early, do bimonthly/biweekly payments (if it is free or allowed). Do not pay someone to set this up for you. It is a waste of money. Other option if you cannot do bimonthly payments is to make the equivilant of 13 payments per year. Either add an extra payment (ie from your tax refund, December bonus etc), or divide your payment by 12 and add that much to your monthly payment. Just make sure that extra payments goes towards principle (usually does) and is not added to escow account. Either method will subtract years from your payments. For example...My house. The mortgage people wanted to set up bimonthly payments (for $300). Basically I paid 1/2 of monthly mortgage every 2 weeks. Cuts the loan term from 20 years to 16. Not bad, but I can do almost the same thing for free by adding some to each month's payment.