Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter

 

redhotloantips fat loss


How To Save Money After Your Loan Has Closed

Written by: Gus Skarlis

Pay Down Your Mortgage

The repayment of principal on a mortgage is an investment that yields a return equal to the interest rate on the mortgage. In other words, the lower your principal balance, the less interest you're paying. If you make additional payments, you save the interest on that amount of money.

Let's say, for example, you add $100 to your normal monthly mortgage payment. This makes your loan balance at the end of the month $100 less than it would have been without the extra payment. In the months that follow, you save the interest on that $100 that you otherwise would have paid.

Since the interest payment that you would have made is determined by the interest rate on your mortgage, the yield on your $100 investment is equal to that rate. A prepayment penalty, however, would reduce the yield. Always make sure your loan does not penalize you for paying early.

To determine whether paying more principal is a good investment, the interest rate should be compared to the yield on alternative investments having minimal risk. Why? There is zero risk on loan repayment.

If your mortgage rate is 6 percent and the alternative yield is a 3 percent earned in a savings account, for example, your future wealth will be greater if you use your excess income to repay principal rather than putting it in the bank. After any period, the reduction in the loan balance would be greater than the increase in the bank account.

If you can safely make a greater return elsewhere, though, invest your money there instead of paying down your mortgage.

Before making any decision on your financial future make sure you see the numbers in black and white and get printouts of all your different scenarios.

About the author:

Gus Skarlis is the only person in America that can get you the best loan program, get you any vehicle at dealer cost, show you how to correct your credit, beat any speeding ticket without using a lawyer and save you money at the Gas Pump everytime... You can find his infomational site at http://www.GusSkarlis.com or you can contact him directly at 702-491-7251


Other Related Articles:

Taking the Time to Find the Best Loan Offers
When you're looking for a loan, it might seem easy to simply accept the first loan offer that you receive. While it's true that you might receive a good deal on a loan this way, there's an even greater chance that you'll end up missing out on...read more

Loans For Bad Credit
Personal debt in the UK has soared to record levels over the past few years. The Bank of England has recently confirmed that personal debt on a national level now amounts to more than 1,065 billion. Recent media reports suggest however that...read more

How to Get a Business Loan in Five Steps.
Need funds to startup or expand your business? Follow these steps: A lender looks at a loan request in three sections known as the "three C's". They are: Credit. Did you pay previous lenders back as contracted? Capacity: Can you...read more


Return to Home

468x60

Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map