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Generally people go for mortgage if he has got a reliable source of income. But even the most reliable jobs can betray at times. You may lose your job or face an accident or can ruin your savings, but interest continues to bug you. Financial burdens clog you and interest amounts add up to a huge amount. You may now find it almost impossible to pay off your debts or mortgage now. The magic phrase towards saving is not any vague word but "extra payment". Pay extra money toward the debt with the highest interest rate. This method will ensure that you pay the least amount of interest and repay your debts as soon as possible. Extra payment means paying a bit more than the minimum. Through this process you will help to save a fair amount of dollars even if the high payment might be difficult to pay initially. An extra payment of $75 will save you $54,666 in interest payments. Not only that, you will also have your home loans cleared almost about nine years earlier. Just by paying an extra $75 a month you knock nearly 10 years off your mortgage. Can you imagine that $75 extra you pay the first month would have cost you about $180 in interest to borrow for 30 years. As you have paid it already, you can abbreviate your last mortgage payment by $180. The next month's extra payment will reduce your last mortgage payment by $178. Always try to pay off the principal amount, which will reduce your interest rates automatically. This is not debt consolidation but budgeting your debt. |
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