Paying Your House Off Early A Little At A Time
Paying a bit extra on each mortgage payment can help you pay off your house early because it reduces the amount you owe faster.
Here’s how it works:
Extra Payments Go Toward Principal - Most mortgages have a mix of interest and principal in each payment. When you pay extra, that additional amount usually goes directly toward the principal (the original amount you borrowed).
Interest Is Reduced Over Time - Interest is based on how much you owe, so as you reduce the principal faster, you pay less in interest overall. This means more of your payment each month goes toward reducing the loan balance instead of paying interest.
Loan Term Shortens - As a result of paying less in interest and more toward the loan, you end up paying off the house sooner than the original loan term (like 30 years).
In short, paying a little extra speeds up the process of paying down the principal, saving you money on interest and shortening the time until you own your home outright.
What is paying extra every month going to do for your mortgage? Try this calculator.
https://www.calculator.net/mortgage-payoff-calculator.html
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