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There is one simple strategy that banks don’t want you to think about when it comes to mortgage payments. This strategy allows you to turn a 30-year mortgage into a 22-year mortgage. How do you do that?
First of all, there are different mortgage options out there: interest-only mortgages, 15-year mortgages, and 30-year mortgages. While many people might prefer the 15-year mortgage, it does come with a more expensive monthly payment that most people can’t afford.
“
One extra payment a year shaves 8 years
off your mortgage!
”off your mortgage!
If you go with the 30-year mortgage but want to pay it off sooner, all you have to do is make one extra payment a year. If you can’t swing an extra payment at the end of the year, consider adding 1/12th of your mortgage payment to your regular monthly payments.
For example, if you had a monthly payment of $2,000, you would pay $2,167 a month in order to get that extra payment. That way, you will own your house free and clear in 22 years while saving tens of thousands of dollars in interest.
