Monday Morning Money Minute
Posted by Mark Matney of Holcomb Law, PC Newport News, VA
www.matneylawpllc.com
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Monday Morning Money Minute
Baby Step 6 – Pay off your mortgage early! As Dave Ramsey teaches, “100% of foreclosures occur on a home with a mortgage.” The more you add to your mortgage payment and the earlier in the loan you pay it, the less interest you will pay and the earlier you will be free from your mortgage.
Let’s look at an example: If a couple buys a $150,000 condo with a $120,000 thirty-year mortgage at 4.5%, then the payment for principal and interest would be $608.02 per month. If they make the minimum payment throughout the loan, they will pay a total of $98,888 in interest at the end of the 30 years. However, if they makes one extra payment per year, then they will pay off the loan in 25 years and 9 months and pay only $82,870 in interest. Even better, if they pay an extra $100 per month with each payment, then they will pay off the mortgage in 22 years and 6 months and only spend $70,944 for interest. Wow!
