"How To Cut Mortgage Payments" 

You can easily save thousands of dollars a year with very little effort by following even a few of the cost-saving measures in the "Save Money" series. The more money-saving measures you adopt, the more money you'll save. Potential savings will vary, depending on your personal situation. See the links to the right for more money-saving ideas.

Save Money On Your Mortgage

Consider refinancing your mortgage. For every $10,000 of your mortgage loan, 1/2 % difference in the interest rate saves you close to $39/year or $3.25/month in interest expense. A $100,000 loan at 8 1/2% ($768.91/month) refinanced at 7% ($665.30) saves $103.61/month or $1,243.32/year, for a total of $37,299 over the life of a 30-year mortgage.

For even more dramatic long-term interest payment savings, consider a 15-year mortgage rather than a 30-year mortgage.

A $100,000 mortgage at 8 1/2% over 15 years ($77,253.12 interest paid over the life of the loan) compared to 30-year mortgage ($176,808.85) interest paid over the life of the loan), saves a whooping $99.555,73 interests over the life of the loan compared to a 30-year mortgage at the same interest rate.

You can achieve similar results by paying an extra principal payment on your 30-year loan each month. (In the early years of a loan, the principal portion of your payment is very small. On a 30-year $100,000 loan at 9%, interest payments would be $189,664.14 over the life of the loan. If you pay an extra $200 towards principal every month you would knock off  $84,546.69 in interests and pay off your mortgage in 15 years and 4 months.

Still another way to achieve these results is to pay one half of your monthly mortgage every two weeks. It is easier to add money to your principal every month as if you use a bi-weekly mortgage payments your lender may charge you monthly fees which defeats the purpose of savings money on your mortgage.

It's All About You!