Increased Bartering Can Have Big Pay-Off
Could you increase your trading efforts to bring another $100 or
more in every single month? Doesn�t sound too hard does it? In fact
it�s such a puny goal that it probably doesn�t even inspire you. But
when you look at what an extra $100 will do for the building of
security and your peace of mind, it may suddenly get you moving.
Here�s the plan: Take the $100 and make an extra payment on your
home mortgage every month to reduce your loan. In most states you
may prepay up to 20% of the original loan during the first five
years without penalty, and after five years lenders cannot impose
any prepayment penalties.
By making just one extra monthly payment a year, you can cut seven
years off the life of a 30-year loan. (That equals $92,700 in saved
mortgage payments � based on a $200,000, 30-year fixed-rate loan at
8%.) But before you start making prepayments, it�s a good idea to
call the lender or loan-servicing company and ask it they have a
preferred method.
If you write a single check, be sure to include a note explaining
that you want the extra amount to be applied directly to your
principal. Otherwise, the money may be applied to your next month�s
payment, which won�t reap the interest savings. Also, keep a copy of
the check and your note just in case there is confusion down the
road.