Wednesday, May 14, 2008

Accelerated Payment Options for Mortgages

For those of you who are homeowners, are you aware that there may be an option to save tens of thousands of dollars in interest and potentially shave years off your mortgage. As many of you know, I recently purchased a home for the first time so the idea of a 30 year mortgage at the age of 37 is kind of scary. I got a great interest of 6%, but when they told me that I would be spending around $128,000 in interest I thought "Wow, that's crazy." I realize that a good portion of my interest is tax deductible, but when I went online to pay my mortgage for the first time it gave me an option to take the Accelerated Payment Option. Making a payment every two weeks for 1/2 of my mortgage payment, will allow me to pay one extra payment per year ultimately saving me almost $28,000 and reducing my payment time to 24.5 years. I'm glad that I have realized this now rather than later so that I can fully optimize my savings. If you aren't sure whether or not your mortgage company offers this option, check out their website. It seems that most of the major mortgage companies are now offering this. How much will you save?

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