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Tips to better manage your mortgage [Video]

Posted on Monday, November 14, 2016 at 7:43:28 PM

If you have a mortgage, you should ensure that you are managing it as intelligently and efficiently as possible. By making relatively modest changes to your payment plan, you will be able to dramatically reduce the amount of time it takes to pay the loan off, and even reduce your total interest paid on that account. 

TIME's Len Penzo recently offered several examples of how making extra payments against the principal can make a big difference throughout the lifespan of a loan. According to the expert, a 30-year, $200,000 loan that is locked in at 6 percent interest and has $1,200 in monthly payments would take 360 months to complete. Additionally, the total interest paid would be more than $231,000. 

However, Penzo explained that if a homeowner made one payment of $1,200 each year on top of their monthly payments, they would knock the time to retire the debt down to 297 months, and reduce the total interest paid to just over $184,000. 

If you would like more guidance on how to best manage your finances, especially in terms of your mortgage, reach out to your local bank for more advice.