Lombard Mortgage Lender helps you pay less interest on your loan

By
Mortgage and Lending with Draper and Kramer NMLS# 189006

Paying less interest on your mortgage is easier than you think!

If you were to make every payment on your mortgage without adding any extra to the principal your loan would look like this:

Loan amount                                  $250,000.00

Interest 6.5% (30 yrs)

Monthly payment  P/I                         $1,580.17

Total interest paid over 30 years       $318,861.22

If you were to make just one extra payment a year of 1580.00 in one lump sum or divide it over the months towards the principal for 30 years this is what you would save:

Loan amount                                  $250,000.00

Interest 6.5% (30 yrs)

Monthly payment P/I                           $1580.17

Extra payment every year                     $1580.00 (or 131.66 each month)

 

Total interest paid over 30 years       $248,879.53

 

That is a total savings of                  $ 69,981.69

And your mortgage is paid off in just under 24.5 years!

That's a huge savings!  Most people will not keep their mortgages for the entire 30 years.  However even if you sell your home in a few years you will have increased the equity in the property just by making one extra payment a year.  This can be done at tax time, with your tax return, or you could apply an amount to the principal each month. 

I recommend that you send a separate check to be applied to the principal and mark in the memo section of your check "apply to principal" to ensure it is applied to your balance properly. 

For more information on how to have more equity in your home or pay less interest talk to Kim Murphy, 1st Advantage Mortgage.

Helping DuPage, Kane, Lake and Cook Counties mortgage their homes for more than 10 years.

Comments (10)

Ray Saenz
Exit Realty Laredo - Laredo, TX
Homes for Sale in Laredo, TX - Texas, Realtor

Hey Kim, you do not stop, :) the little time that I spend here, I always see you around , writing and writing, awesome :) keep the good work my friend !

Jul 08, 2007 05:43 PM
Susie Roscoe
Signature Realty Associates - Brandon, FL
Real Estate Specialist | Brandon, FL
 Thanks for a really helpful blog this Monday morning!!!  I never like the "heart attack page" of the loan but THIS SHOWS how to save people tons of money!!  GOOD JOB!!!
Jul 08, 2007 11:33 PM
Michael Delp
Mortgage Pro - Telford, PA
Great info Kim! It's good information. You might want to change the payoff from 24.5 months to 24. 5 years.
Jul 09, 2007 01:30 AM
Kim Murphy
Draper and Kramer - Lombard, IL
Mortgage Loans in DuPage, Kane, Cook, Lake, Will C

Ray...  I keep trying!  Thank you for the support!

Susie... I know what you mean, the truth in lending is always the scary document!  This information helps it!  Happy Monday!

Michael... OOOPps!  Thanks Michael for keeping me on track!  Your right its years not months!

Thanks for stopping by!

Jul 09, 2007 01:34 AM
Michael Delp
Mortgage Pro - Telford, PA

I didn't mean to be a blog Nazi first thing Monday morning. Just wanted to keep you on your toes.

Have a wonderful day!

Jul 09, 2007 01:40 AM
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

I always encourage my people to do the extra pmt.

I hate it that they sometimes pay their lender several hundred bucks to set them up on a 'plan' that accomplishes the same thing.

 

Jul 09, 2007 03:19 AM
Rick and Lynn Orze
RE/MAX All Pro - Carol Stream, IL
Carol Stream, IL RE/MAX All Pro
This is HUGE savings. I don't think people realize how much money they actually save! Thanks for helping get the word out!
Jul 09, 2007 01:15 PM
Kim Murphy
Draper and Kramer - Lombard, IL
Mortgage Loans in DuPage, Kane, Cook, Lake, Will C

Michael...LOL your not the Nazi blog, I appreciate you catching it, since I didnt!

Tom... I agree!  And sometimes when they set it up, it doesnt always get credited until the entire amount is received, saving them NOTHING!

Rick and Lynn... It is always a surprise when I tell my clients this information!

Jul 09, 2007 05:04 PM
Ray Saenz
Exit Realty Laredo - Laredo, TX
Homes for Sale in Laredo, TX - Texas, Realtor

Kim, Biweekly payments save a lot and some extra to the principal save more years too, :)

it is awesome how it works right ? :P

Jul 20, 2007 11:29 PM
John Veler
Fizber - Nimshew, CA

To my mind variable home loans are quite risky. Who knows how your financial situation may change in a few years. But this type may be acceptable for those who plan to move out in 5 or 10 years or this one is their second mortgage. It is not so easy to find a low interest lender and may take some type. This service http://www.fizber.com/sale-by-owner-home-services/mortgages.htm helps to find a low interest lender fast.

Jul 09, 2008 11:20 PM