Pay off your mortgage loan early

by Washington Federal Team on October 23, 2012

Even if you’ve locked in a record-low rate or built up a substantial down payment, mortgages can be difficult to balance without careful budgeting. Washington Federal offers a helpful mortgage calculator to help estimate monthly payments. However, to really take control of your money you need more insight. You can now use Washington Federal’s new account aggregation program, snap!, to help you forecast your financial future.

Snap! makes managing your finances faster, easier, and more accessible than ever. That means you can effectively track spending and learn how to reduce your debts more quickly.

In addition, here are a few ways to own your home sooner and save money along the way.

Pay more each month
Assume you have a 30-year mortgage with a balance of $200,000 and a rate of 4.5%. This would make your monthly payment about $1,013.

If you add an extra $75 principal to each monthly payment, this small, additional amount could shorten your repayment period by almost 4 years. Because you’re reducing your outstanding balance more quickly, you’ll save over $25,000 over the 30-year life of your loan.

Make biweekly payments
Instead of paying a monthly mortgage payment, some lenders offer a biweekly payment, where you make half the monthly payment every two weeks. With biweekly payments, you contribute 13 payments over a year’s time rather than the traditional 12. This could reduce your mortgage repayment period by several years.

In the same way, if you make one extra lump-sum payment a year in an amount equal to your regular monthly payment, you can knock several years off the life of a 30-year loan.

Intermittently contributing extra payments to principal can save you substantial time and money and help you own your home free-and-clear sooner.

Contact us today to learn more about mortgages and how you can save money with Washington Federal.

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