If you are a homeowner, you know that making mortgage payments can often feel like a heavy burden. However, there is a simple strategy that can help you pay off your mortgage faster and save money on interest – and that is by making an extra 1/6 of your monthly payment on the 15th of each month.
Understanding the Strategy
When you make your regular monthly mortgage payment, the majority of the amount goes towards paying off the interest, with a smaller portion going towards the principal. By making an additional 1/6 of your mortgage payment on the 15th, you are essentially making an extra principal payment, which can significantly reduce the amount of interest you owe over the life of the loan.
The Benefits
There are several benefits to making this extra payment. First, it reduces the principal balance on your loan, which means you will pay less interest over time. This can potentially save you thousands of dollars in interest payments and help you pay off your mortgage sooner.
Additionally, making extra payments can also help you build equity in your home at a faster rate. Equity is the difference between the market value of your home and the amount you owe on your mortgage. By paying down your mortgage more quickly, you increase the equity in your home, which can be beneficial if you ever decide to sell or refinance.
How to Implement the Strategy
Implementing this strategy is quite simple. You can either arrange for an automatic 1/6 payment to be made on the 15th of each month, or you can manually make the extra payment. Be sure to communicate with your lender and confirm that the additional payment will be applied to the principal balance of the loan.
Things to Consider
Before implementing this strategy, there are a few things to consider. Make sure that your lender does not charge prepayment penalties for making extra payments. Additionally, always check the terms of your mortgage to ensure that the extra payment will be applied to the principal balance of the loan and not towards future payments.
Final Thoughts
By implementing the strategy of paying an extra 1/6 of your mortgage on the 15th of each month, you can potentially save a significant amount of money on interest and pay off your mortgage earlier. This simple yet effective approach can make a big difference in your financial future.
Frequently Asked Questions For Paying 1/6 Of Mortgage On The 15th: Unlock Your Financial Freedom
Can I Pay 1/6 Of My Mortgage On The 15th?
By paying 1/6 of your mortgage on the 15th, you can effectively reduce your monthly burden and save money in the long run.
How Does Paying 1/6 Of My Mortgage On The 15th Benefit Me?
Paying 1/6 of your mortgage on the 15th can help you pay off your mortgage faster and reduce the amount of interest you owe.
Will Paying 1/6 Of My Mortgage On The 15th Affect My Credit Score?
No, paying 1/6 of your mortgage on the 15th will not negatively impact your credit score. As long as you make the required monthly payments, your credit score should remain unaffected.
Are There Any Penalties For Paying 1/6 Of My Mortgage On The 15th?
Most mortgage lenders do not impose penalties for making additional payments towards your mortgage. However, it is advisable to check with your lender to ensure there are no restrictions or fees.
Ismail Hossain is the founder of Law Advised. He is an Divorce, Separation, marriage lawyer. Follow him.
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