Americans are now becoming more financially literate especially because of the realities that this COVID-19 pandemic brought. Life before the pandemic was just how we usually went about it – relaxed and chill. But now, it is as if a rug has been pulled out from under us and we became acutely aware of our current situation health-wise and financially as well.
Extra payments against the principal amount A lot of people are looking for answers on how to pay off mortgage using a mortgage calculator and you would be surprised to know that putting out an extra payment towards the principal loan amount will go a long way. Spend below your means Believe it or not, taking your lunch to work and staying away from coffee shops every morning would help you shave off a significant amount that you can start saving to pay for the extra payments that we talked earlier. An average lunch costs $12.75 per person. If you eat out 5 days a week, that is $63.75, which is still okay. But multiply that amount by four (weeks) and your monthly expense for lunch is $255. Then multiply it by 12 months and that is a whopping $3,060! The average monthly payment for a median mortgage is $1,100. By brown-bagging your lunch for a year, you can pay off about three months’ worth of your mortgage. Add to that amount the cost of the coffee you save by brewing your own cup at home. Prepare to make a bigger down payment The best way to save money on mortgage interest would be to pay for your home in cash. But even that is not the best option especially if you aren’t financially liquid. The next best thing is to prepare for a bigger than a minimum down payment. There are good deals in the market and it can help you find what is best for you. Consult a loan mortgage professional to help you find the best deal in the market. Forget about what people say about living, and spending within your means. The key is to live below your means. This is not going to be forever anyway. Keep your sight focused on the goal of paying off your mortgage earlier. Photo credit.