If you could afford to pay a little extra each month, then an overpayment calculator can show you how much you might save.
The general theme is to pay extra on your monthly mortgage payments. Pay 600 instead of 500 if you can.
The savings made at the end may stagger you. We're talking thousands saved and years knocked off.
As every mortgage deal is slightly different it's hard to give examples for your figures. You should put your figures into an overpayment calculator and see your own results.
A pretty standard example is a 100,000 mortgage at 5% interest. Your monthly payments would be in the region of 580.
If you could pay 680 every month your mortgage would be finished in just over 18 years and you'd save 20 grand in interest fees.
Considering you agreed to 25 years on the deal you are now free 6 years early.
I think that you should most certainly make overpayments if you can. The interest saved snowballs into huge savings later on.
Another quick example, using the same figures as earlier but paying 200 a month over the top. I know this is a lot more but if you could stretch to it now it's worth your while.
If you did pay this two hundred extra you would save almost ten years off the mortgage and save cash to the sum of 32 thousand. They are really eye opening figures.
Another benefit to paying extra and getting the mortgage over with early is the fact you aren't paying anything for the years you save. And that can add up to a lot of money saved.
You could save yourself another 40 thousand because you aren't paying the 580 per month for the last 6 years.
It's got to be great news for you when all this extra saving doesn't even come out of your pocket. It stays there.
We've been talked at and advertised to over the years. And we now firmly believe we have to stick with the deal offered, but that's poppycock.
Would you keep your mortgage for 25 years if you became rich overnight? My guess is not, and with overpayments you can also reduce the length of your mortgage.
However, your lender won't tell you any of this!
However, your lender won't tell you any of this!
Article Source: the-Articles.com
About the Author
Author: MontyBurn
Monty Burn was head of the Voluntary Mortgage Regulator until his sacking for assisting too many people
Visit the National Debt Solution Center Website
Resources and Information About Loan Modification
Find the Answers You Need and Get Help Today
Lower Your House Payments with Expert Attorney Assistance
Showing posts with label society. Show all posts
Showing posts with label society. Show all posts
Sunday, June 21, 2009
Friday, June 19, 2009
Could A Mortgage Overpayment Calculator Help You?
Before we start to answer the question in the title. Let's explain what a mortgage overpayment calculator actually is.
Most overpayment calculators come on websites. You could get a standalone bit of software or a spreadsheet to do the job though.
You simply enter the terms of your particular mortgage, or even one you are planning and it throws out figures that tell you how much cash and how many years you could save.
Many people fail to realise (or are not told) that the usual 25 year terms aren't fixed. If you can afford to pay extra you can reduce this by years. If you can afford to pay extra you should.
Basically what an overpayment calculator tells you is if you pay X amount of cash extra each month then you knock Y amount of cash & years of your mortgage.
Sometimes the saving can be staggering. And these savings are yours not the lenders.
OK, back to the question in the title. What could it do for you? The answer depends on your circumstances.
Amounts borrowed and individual mortgages come in many different flavours. But it matters not if you can make a few overpayments as it will still reduce the length. Which is good tidings for you.
If I give you an example of a 100,000 mortgage at 5% interest over 25 years. If you could pay an extra 100 each month from month one. You'd save over 6 years and 20 grand.
Now I don't know how you feel but If I could afford to pay that extra then I most certainly would.
The same mortgage but paying only 50 extra a month still knocks off three and a half years and 12 thousand. Still very nice savings.
In the six years saved in the example you make no payments at all. Many people forget that fact.
This means you don't pay, but save another 40 thousand over the last six years.
If you can't afford or don't plan to make long term payments then at least try to make some extra payments early on. This early overpayment can compound nicely later on making hefty savings.
If you have or are thinking of getting a mortgage you owe it to yourself to have a play with a mortgage overpayment calculator and put your particular figures in it. You may be staggered at what comes out.
Mind you, your lender won't want you to know all this!
Article Source: the-Articles.com
About the Author
Author: MontyBurn
Monty Burn was head of the Voluntary Mortgage Regulator until his sacking for helping too many people
Visit the National Debt Solution Center Website
Resources and Information About Loan Modification
Find the Answers You Need and Get Help Today
Lower Your House Payments with Expert Attorney Assistance
Most overpayment calculators come on websites. You could get a standalone bit of software or a spreadsheet to do the job though.
You simply enter the terms of your particular mortgage, or even one you are planning and it throws out figures that tell you how much cash and how many years you could save.
Many people fail to realise (or are not told) that the usual 25 year terms aren't fixed. If you can afford to pay extra you can reduce this by years. If you can afford to pay extra you should.
Basically what an overpayment calculator tells you is if you pay X amount of cash extra each month then you knock Y amount of cash & years of your mortgage.
Sometimes the saving can be staggering. And these savings are yours not the lenders.
OK, back to the question in the title. What could it do for you? The answer depends on your circumstances.
Amounts borrowed and individual mortgages come in many different flavours. But it matters not if you can make a few overpayments as it will still reduce the length. Which is good tidings for you.
If I give you an example of a 100,000 mortgage at 5% interest over 25 years. If you could pay an extra 100 each month from month one. You'd save over 6 years and 20 grand.
Now I don't know how you feel but If I could afford to pay that extra then I most certainly would.
The same mortgage but paying only 50 extra a month still knocks off three and a half years and 12 thousand. Still very nice savings.
In the six years saved in the example you make no payments at all. Many people forget that fact.
This means you don't pay, but save another 40 thousand over the last six years.
If you can't afford or don't plan to make long term payments then at least try to make some extra payments early on. This early overpayment can compound nicely later on making hefty savings.
If you have or are thinking of getting a mortgage you owe it to yourself to have a play with a mortgage overpayment calculator and put your particular figures in it. You may be staggered at what comes out.
Mind you, your lender won't want you to know all this!
Article Source: the-Articles.com
About the Author
Author: MontyBurn
Monty Burn was head of the Voluntary Mortgage Regulator until his sacking for helping too many people
Visit the National Debt Solution Center Website
Resources and Information About Loan Modification
Find the Answers You Need and Get Help Today
Lower Your House Payments with Expert Attorney Assistance
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