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Want to save $42,000 on your mortgage?  Here's how...

If you are like most people today you're looking to save on just about everything, so why not save on your mortgage too.  Did you know that by sending extra principal to your lender you can reduce the total interest cost of your loan.

Here's an example.  If you had a 5.5%, 30 year fixed rate loan for $200,000 and you made an extra $100 payment each month you would save just over $42,000.  Not only that, you would also be paid off in about 26 years!  Not a bad tradeoff for $100 per month.

With today's rates it may even be possible to refinance to a lower interest rate and even save more!

While saving interest by sending extra principal to the lender may be a great idea you may want to consider first that you have adequate reserves available for emergencies and other budgeted items.  Preparing for such things as storm damage to your home, insurance deductibles, or unexpected maintenance along with at least six months of your monthly expenses is a great way to proactively protect you and your family from unexpected events.

Once your reserves are met, finding the right balance of principal reduction and additional savings is essential to help maximize your long term overall financial plan.  A mortgage consultant can help guide you through some of  this process to see what affect paying down your mortgage will have or whether you would benefit with a refinance.

Interested in seeing how making extra principal payments looks for you? Get your free mortgage update by contacting me at greg@greggetzmortgages.com.