Paid off home 8 years early, small payments add up.When we were just buying our first home, we made sure it didn't have any pre-payment penalties, then I ordered an amortization schedule from the mortgage co. I could see that we were paying just a pittance on the principal every month, but lots on the interest. By sending in small amounts every so often, we paid off our loan 8 yrs earlier and saved thousands in interest payments. You can send an extra principal payment every month or 2 & 3 principal payments once every so often. If you just make monthly payments, you will not break even (pay the same on principal & interest) until year 23 on a 30 year loan, so you can see that almost all the money paid out every month is the interest to the mortgage co. This tip is easy to do the first several years when the principal payment is small. Harder to do on the back end of the loan when you pay a lot more of the principal off.
By Linda from OKC