• About Me
  • Courses
  • Contact
    • Ads
  • Press & Media
  • Free eBook
  • Free Facebook Group
  • Disclosures
    • Privacy
Yes, I Am Cheap
ADVERTISEMENT
  • Home
  • News
    • All
    • Politics
    stimulus

    Why You Might Not Get A Stimulus Payment

    Credit card security, equifax data breach

    How to Claim $125+ from the Equifax Data Breach Settlement

    foreclosure homes - When Does It Make Sense to Refinance?

    When Does It Make Sense to Refinance?

    no apple

    Get A New iPhone? Heck No!

    poor definition

    Mom Fired For Working At McDonald’s While Kid Plays In Park…Was She Wrong?

    What’s Keeping You From Finding A Job

    U.S. Students Fall Behind: Seemingly Get Dumber By The Minute

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Lifestyle
    • All
    • Food
    • Health
    mask insert

    Wearing A Mask? This Can Help You Breathe Easier

    high deductible health plan

    What Is A High Deductible Health Plan?

    free thanksgiving dinner

    How to Get Your Thanksgiving Meal for Free

    using hand sanitizer, your own

    How to Make Your Own Hand Sanitizer

    Yoga pose

    5 Ways to Practice Yoga on a Budget

    Traveling, new cultures, Start a Saving Challenge, Spend Smart on Food

    3 Simple Ways to Save for A Vacation

    Trending Tags

    • Golden Globes
    • Game of Thrones
    • MotoGP 2017
    • eSports
    • Fashion Week
  • Investing
  • Make Money
  • Learn Something
  • News
  • Reduce Debt
  • Rental Property
No Result
View All Result
  • Home
  • News
    • All
    • Politics
    stimulus

    Why You Might Not Get A Stimulus Payment

    Credit card security, equifax data breach

    How to Claim $125+ from the Equifax Data Breach Settlement

    foreclosure homes - When Does It Make Sense to Refinance?

    When Does It Make Sense to Refinance?

    no apple

    Get A New iPhone? Heck No!

    poor definition

    Mom Fired For Working At McDonald’s While Kid Plays In Park…Was She Wrong?

    What’s Keeping You From Finding A Job

    U.S. Students Fall Behind: Seemingly Get Dumber By The Minute

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Lifestyle
    • All
    • Food
    • Health
    mask insert

    Wearing A Mask? This Can Help You Breathe Easier

    high deductible health plan

    What Is A High Deductible Health Plan?

    free thanksgiving dinner

    How to Get Your Thanksgiving Meal for Free

    using hand sanitizer, your own

    How to Make Your Own Hand Sanitizer

    Yoga pose

    5 Ways to Practice Yoga on a Budget

    Traveling, new cultures, Start a Saving Challenge, Spend Smart on Food

    3 Simple Ways to Save for A Vacation

    Trending Tags

    • Golden Globes
    • Game of Thrones
    • MotoGP 2017
    • eSports
    • Fashion Week
  • Investing
  • Make Money
  • Learn Something
  • News
  • Reduce Debt
  • Rental Property
No Result
View All Result
Yes, I Am Cheap
No Result
View All Result

How To Save Thousands of Dollars On Your Mortgage Without Refinancing

Sandy Smith by Sandy Smith
February 5, 2021
in Learn Something, Save Money
0
How To Save Thousands of Dollars On Your Mortgage Without Refinancing
Share on FacebookShare on Twitter

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.


Welcome back! Have you checked out the free webinar on how to establish credit for your small business?


Interest rates recently fell to 3.750% for a 30-year fixed mortgage.  This historically low rate has prompted many homeowners to refinance their current mortgages in order to get the lowest rate possible.  A coworker recently closed on her home only to witness the new, lower rate literally two weeks later.  She thought about refinancing her newly obtained mortgage, but I showed her a quick and simple way to save thousands off her mortgage without paying for a refinance.  I’ll share that with you now.

We’ll use my coworker as a case study to make this simple.  Let’s call her Jane Dough to protect the innocent.  Had she refinanced her mortgage she would have expected to pay loan origination fees, title search fees, closing costs and points, which she has virtually just done.   Not a cheap prospect at all.

Jane and her husband, ah, John Dough, purchased their home with a loan for $480,000 at a rate of 4.75% for 30 years.  Their monthly payments will amount to $2,503.91.  In their first year of payments they will pay $7,406.79 towards the principal and $22,640.13 in interest alone.  Looking at the numbers this means that their interest payments will add up to more than three times their principal payments.  That’s a lot of money.  If they continue with those regular payments at the end of thirty years they would have paid $421,406.60 in interest for a total payoff amount of $901,407.6o, almost two times the original mortgage amount.

So how do they lower the total amount paid without refinancing?  They must simply make additional payments above their regular payment consistently.  It doesn’t even have to be much to make a big difference.  If they paid only $30 extra per month, their total payments would fall to $888,750.87, a savings of over $12,656.73.  They would also shave nine months off their loan period.

I crunched through these numbers with Jane and she was surprised at how little it took to make a big difference.  Going a bit further I showed her what would happen with an extra $100 payment per month.  The total payment would fall all the way down to $862,242.20, a reduction of $39,165.40.  I showed her that it would only take $25 per paycheck from both her and her husband, a relatively small amount, to make a big difference. This would also reduce the loan period by two years and four months.

Okay, so let’s be really, really aggressive.  What could you do with an extra $200 payment per month? The total amount saved goes all the way up to $71,197.72 and the loan period falls by four years and four months.  I understand that an extra $50 per person per paycheck might be a stretch, but for some couples this is doable.

Let’s put this all together for comparison.

Regular Payment Extra $30 Extra $50 Extra $100
Total Interest $421,406.60 $408,749.89 $382,223.28 $350,209.03
Total Paid $901,407.60 $888,750.87 $862,242.20 $830,209.88
Savings $0.00 $12,656.73 $39,165.40 $71,197.72
Time Saved 0 9 mths 28 mths 52 mths

The best part about all of this, other than the amount that you can potentially save, is that a longer term mortgage typically carries a lower rate, and if you can’t make an extra payment you can always pay your regular mortgage payment with no worries.  Also, depending on what state you’re in and how fast you want to pay off your mortgage, you typically won’t incur any prepayment penalties.

Do you add extra payments to your mortgage?  What has your experience been?

See the amortization schedules in Excel here.

Related

Previous Post

Differences Between Debt Consolidation and Debt Settlement

Next Post

Paying off Your Home: The Biweekly Mortgage

Sandy Smith

Sandy Smith

I started this blog years ago as a way of keeping myself accountable to my own debt reduction plans. Now I'm using this site to help others get out of debt, and learn about personal finance so that they can live their best lives.

Next Post

Paying off Your Home: The Biweekly Mortgage

Stay Connected

  • 5.6k Fans
  • 10.1k Followers
  • 4.7k Followers
ADVERTISEMENT
  • Trending
  • Comments
  • Latest
Tightwad’s Ways to Save on Wedding Food

Tightwad’s Ways to Save on Wedding Food

February 5, 2021
Living Costs

Ecologically Sound Ways To Reduce Your Living Costs

February 5, 2021
Cost of Living in the 1950’s as Compared to Today in 2013

Cost of Living in the 1950’s as Compared to Today in 2013

February 5, 2021
Net Worth - A Little Motivation For You

How I Doubled My Net Worth In Five Years On A Crappy Salary

February 4, 2021
Federal Student Loan Debt Relief

Why Some People Should Wait Before Applying for Student Loan Forgiveness

October 18, 2022
AirBnb Experiences

Why Airbnb Experiences Are The Best Side Hustle

July 10, 2021
mask insert

Wearing A Mask? This Can Help You Breathe Easier

February 21, 2021
Scams

What’s The Deal With All The Scammers Lately?

February 18, 2021

Recent News

Federal Student Loan Debt Relief

Why Some People Should Wait Before Applying for Student Loan Forgiveness

October 18, 2022
AirBnb Experiences

Why Airbnb Experiences Are The Best Side Hustle

July 10, 2021
mask insert

Wearing A Mask? This Can Help You Breathe Easier

February 21, 2021
Scams

What’s The Deal With All The Scammers Lately?

February 18, 2021

Helping you live your best financial life through personal finance news and education

Follow Us Everywhere

Browse by Category

  • About Me
  • Auto
  • Credit
  • Credit Cards
  • Finance 101
  • Food
  • Get Out of Debt Course
  • Health
  • Investing
  • Learn Something
  • Lifestyle
  • Make Money
  • News
  • Off The Reservation
  • Partner Posts
  • Politics
  • Rants
  • Reader Advice
  • Recipes
  • Reduce Debt
  • Rental Property
  • Save Money
  • Scams
  • Special Offers
  • Spend Money
  • Sponsored Posts
  • Video Pick
  • Weekly Roundup
  • Work

Recent News

Federal Student Loan Debt Relief

Why Some People Should Wait Before Applying for Student Loan Forgiveness

October 18, 2022
AirBnb Experiences

Why Airbnb Experiences Are The Best Side Hustle

July 10, 2021
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2021 Say Yes Services LLC. All rights reserved.

No Result
View All Result
  • About Me
  • Courses
  • Contact
    • Ads
  • Press & Media
  • Free eBook
  • Free Facebook Group
  • Disclosures
    • Privacy

© 2021 Say Yes Services LLC. All rights reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT