How to Save $147,553 on Your Home Mortgage

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Crucial home mortgage information that mortgage lenders don’t advertise.

Mortgage lenders deal in two currencies, time and money.

When you borrow money for real estate, you repay the amount you borrow, plus you pay for the privilege of repaying the money over time. The longer the period of time you take to repay the mortgage, the greater your total cost.

Let’s imagine:

1) You buy a home, borrowing $189,000 from a mortgage lender.
2) Your mortgage interest rate is 6.5%.

Scenario #1:

1) The length of your mortgage is 30 years.
2) Your mortgage interest rate is 6.5%.
3) Your monthly mortgage payment will be $1194.
4) You will make this payment 12 months each year, for 30 years, totaling 360 payments.
5) At the end of the mortgage term, you will have borrowed $189,000 and repaid $430,059.60.

Scenario #2:

1) The length of your mortgage is 15 years.
2) Your mortgage interest rate is 5.75%. (Interest rates are typically lower for shorter term loans than for long term loans.)
3) Your monthly mortgage payment will be $1569.
4) You will make this payments 12 months each year, for 15 years, totaling 180 payments.
5) At the end of the mortgage term, you will have borrowed $189,000, and repaid $282,506.40.

In Scenario #2, your monthly mortgage payment is $375 more, but your total savings was $147,553 over the length of the loan.

Can’t afford the higher payment? Buy less house. The payment on a $145,000 loan, over 15 years, is roughly the same as the payment on $189,000, over 30 years.

This is but one example. Play with the numbers to find the best deal for you. Search Google for “mortgage calculator” or “mortgage payment calculator” to locate helpful tools.

If it is important to you to buy the higher priced house, stay turned for Part 2 of this article. There still may be a way to realize substantial savings.

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