Pay off mortgage, Save Money
Sam and Diane need the internet in their new home, so they look at internet packages. They decide to go for the second tier internet, saving them $10 per month. And of course, they apply that extra $10 per month towards their mortgage.
It’s just $10 per month, right?
Well, just $10 per month extra will save Sam and Diane $7,078.40.
High five! Sam and Diane will take that!
Don and Lynn just purchased their first home. Don is a small business owner and Lynn stays home with their three small children. This is Don and Lynn’s first home, and with nearly 3500 square feet, 5 bedrooms, 4 baths, this two-story is a heck of a first home! Don and Lynn were able to put good money down and got a screaming interest rate on their home.
Don and Lynn understand the power of compound interest, and especially the power of compound interest working against them for 30 years, and they decide to pay off their mortgage by prepaying $175 extra per month. That comes up to $2,100 per year. That’s a good chunk of change, but when you put those numbers in the prepayment mortgage calculator, you will be amazed at how much Don and Lynn will save when they apply that to their mortgage each and every month.Continue Reading
I was talking with a mortgage lender today, Brad Bailey from First Colony Mortgage. I showed him how my formulas work: $1=$5, and $2=$1,000. If the typical homeowner were to pay just $1 extra towards their mortgage, they would save $5. If they were to pay just $2 per month extra, they would save $1,000. If they prepay just a little more, they’d save a lot more.
Being a finance guy, he said he loved the idea and was always thinking about ways to save money. I told him about dropping cable TV, and how it was hard for me at first, but when you’re saving $100/month, and when you see that that $100 applied to the mortgage saves $10,000’s, it makes it much easier to live without cable.
Brad’s eyes lit up. We were speaking the same language. He said, “People just don’t realize how much they’re spending. If you are even talking about lunch every day, that’s hundreds of dollars every month! It adds up!”
I was excited to see him get excited, and I responded: “It doesn’t just add up. It multiplies up!” I hadn’t ever thought about it like that, but that’s exactly what compound interest does for you when you put it to work for you. It doesn’t just add up. It multiplies up! Just saving on lunch every day could add up to hundreds of dollars. But if you were to consistently invest the savings into your mortgage, you’d save thousands of dollars.
Keeping kids entertained during summer can be a challenge. But what if you could not only keep your kids entertained, but also educate them? Here are some great ideas from Buzzfeed about how to keep your kids busy while learning cool stuff at the same time!
http://www.buzzfeed.com/mikespohr/activities-that-will-keep-your-kids-busy-all-sum?s=mobile