Sitting at the closing table is the culmination of the transaction for the buyer. At the closing, the funds are transferred, papers are signed, and the ownership passes from the Seller. One of the documents the Buyer receives at the closing is a copy of the amortization schedule, a sheet that outlines every payment that will be made over the life of the loan an categorizes what portion will be spent on principal and what portion is allocated to interest. Another bit of information is the total amount that will be paid over the life of the loan if no extra payments are made, and no other terms are changed. Several people are shocked to see just how much extra money is spent on interest over the life of their loan and I am often asked if there is any way to save some of those costs.
MSN Real Estate, posted an article by Keith Gumbinger of HSH.com that outlines one simple way that people can save some of that interest. Will biweekly mortgage payments save you money? answers that question with a simple answer: YES! This post offers a more in depth explanation, but the basic principle is this, if you make monthly payments, you will make 12 payments a year; however, biweekly payments every two weeks equates to 13 payments a year. This extra payment helps reduce the principal amount of the loan faster, which helps you reduce the term of the loan and saves you lots of money in interest! Check out the article for tips on how to calculate just how much interest you could save if you started making biweekly payments!
If you have other interest saving tips, let me know in the comments section below, and remember to share this information with your friends and family! Follow my blog, friend me on Facebook and follow me on Twitter to keep up with everything I ever post!