Can You Squeeze in an Extra Mortgage Payment on Your Home Every Year?

Posted by Lauren Spencer on Monday, July 15th, 2013 at 2:37pm.

What if you could accelerate the mortgage payment on your Santa Cruz home so that you own your property several years earlier than your 15 or 30 year term? Making your final mortgage payment and owning your house is an incredibly feeling and there is a simple way that you can bring about that rewarding day much sooner.

By making one extra mortgage payment every year, you will be able to pay off your mortgage years earlier without putting a lot of stress on your present day finances. Although it might not seem like a lot, just one extra payment per year can help you to significantly reduce the length of your mortgage.

For example, if you have a 30 year mortgage with a fixed rate, it could be possible to pay off your loan in 25 years instead of 30 when you make an extra payment per year. You will also be able to save thousands of dollars over the years in interest charges.

How to Fit the Extra Payment Into Your Budget

If you think that your budget is too tight to squeeze in the extra yearly payment, it’s time to start thinking about what adjustments you can make. With a bit of clever budgeting, you can find the extra cash needed.

First of all, break the extra payment down by dividing it by 12. For example, if your monthly mortgage payment is $1600, you will need to save an extra $133 per month to be able to make a full extra payment every year. Or, you could think of it as $33 per week or $4.75 per day. Surely you can survive on $4.75 per day less than you are spending right now?

There are many ways that you could find this extra money. It’s the difference between eating at a restaurant or cooking at home once or twice per week, bringing home brewed coffee to work in a thermos rather than going to the expensive coffee shop or cancelling a cable TV package that you never watch. Take a look at your budget so that you can determine where you can cut your expenses.

When you make your goal of an extra payment every year, you could try to save more so that it will be even sooner when you have the satisfaction of owning your home.

For more information about buying a Santa Cruz home, feel free to contact me at 831.662.6522 or email me at Lauren@LaurenSpencer.com.

For additional real estate information, please visit my homepage at www.MySantaCruzRealEstate.com.

Resources:

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About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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