Save Money from your Mortgage!

When I'm not spending the amount of money I planned and was ready to spend, I consider it as a saving, or even making some extra money. The point is that you can save some money - sometimes big money - on your mortgage. First of all make a schedule for the payments you have to do so you could see how much you can save following these tips.

Establish your mortgage for payments bi-weekly. Lets take this example: your monthly payment for the mortgage is $1000; during one year it would be $12,000 less to pay, right? when paying bi-weekly, you have to make 26 payments of $500 - gathering $13000 a year.

Make adjustments. Most mortgage will allow you to make an annual lump-sum payments to some extent. My mortgage will permit me paying up to 15% of the main amount annually. If you get a tax or other form of payment that wasn't expected ( some lotto winning, legacy, etc.), put some or all of it for your mortgage. These lump-sum payments will go directly to the principal amount, which save you a lot of money for the next years. Assuming the mortgage is $200,000 has to be liquidated in 25 years at 6% of monthly payments. For example, in 8 months of mortgage you get a tax return check for $ 2,000 and apply it to mortgage. This saves $6544.68 for you and shortens the mortgage repayment with six months!

Make some payments rounding up. This could save you even thousands if you begin rounding from the start. For example if the payment is $836.77, pay $850. The $13.23 extra payment goes to the main mortgage.

In case the mortgage rate falls, keep paying the same. If you used to pay $800 every 2 weeks and with the new rate you have to pay $770, continue to pay $800, again the extra $30 goes to the principal and saves some money for you.

In the long run you surely will have some salary (income) increase, my advice is to raise the payment of your mortgage by that amount, of course if you do not have more important things to do with them. At the beginning of this year I got a good raise, I made the divide by 26 (the number of payments I make a year long) and added it to each payment. The effect will be as the in the above examples.

Pay an extra $10 or as much you as you can afford per every payment you make.

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[Source: Loan Mortgages]