How did I do it? Fire the staff? Close-off the third floor? Rent-out the theater room for teenage birthday parties?
Nope. This one was even easier. My mortgage holder has a plan where they will pull half of my mortgage payment every two weeks.
So, right after I get my paycheck, they automatically get half of what I usually send them. I don't have to do a thing and don't even really have a chance of accidentally spending that money.
But the bonus is that since it's every 2 weeks instead of twice a month, that means that they pull 26 payments instead of 24. That means they apply an extra payment every year.
That means that over the remaining life of my loan, I'll pay it off years earlier and save almost $30,000 in interest. (and before you imagine that I've got some unholy interest rate, I'll go ahead and confess that it's a fixed 6% loan)
So, let's recap:
1) Mortgage payment is pulled a little from each paycheck automatically. I don't have to worry about forgetting to send it in.
2) Same payment as before
3) Save tons of money
4) Pay off house years early
Total time spent to save this money:
- 10 minutes: reading the plan specifics online
- 5 minutes: signing-up online
I'm having a hard time seeing any real problems with this plan.
2 comments:
Damn, my first guess was going to be ¨He fired the staff!¨
(I try and do something similar with my student loans to get them paid off sooner, nice to see it´s available for mortgages too).
I would love to do that!
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