(480) 656-5751 michael@faulknermortgage.com
Lending in CA and AZ only
Lending in CA and AZ only

Home Loans & Mortgages in Scottsdale, AZ

“A penny saved is a penny earned.” While a penny is an insignificant amount of money, the habit of saving is a big deal.

The same can be said about the way you pay for your mortgage. One payment out of the many you promised to make over the 30-year life of your loan can seem small in the grand scheme of things – it’s not.

My job as a mortgage educator is to best prepare you for what happens BEFORE and AFTER you purchase your home. Understanding the financial mechanism that governs your mortgage will allow you to take financial strides that help secure a more promising future for you and your family.

With that in mind, I want to offer a few examples as to why it is wise to try to make an extra mortgage payment annually.

If you’re a first-time homeowner, you may be surprised by all the expenses – mortgage insurance, property taxes, costs for repairs – so the thought of making another home-related payment may not sound too great. Don’t worry, here are some benefits of making just one extra payment per year.

Save big on interest dollars: Through the amortization process, a chunk of your monthly mortgage goes toward interest. You can make a bigger dent into the amount of interest you owe by simply lowering your principal balance, which can be accomplished through 13 mortgage payments a year. This will lower the amount of interest added each month, which can result in savings at payoff time.

Boost equity: Owning a home is like owning your very own piggy bank. It’s an investment with the potential for big-time dividends. As you reduce the principal amount on your loan, you are helping your equity increase (assuming home values remain as they are, which is steadily increasing). This built-up equity provides additional financial security, which will come in handy if you decide to sell your home, or secure a second mortgage for cash or home improvements.

Pay off loan earlier than expected: If you’re like many financially prudent individuals, it’s always better to be early than late. Paying a little extra each year will allow you to pay down your mortgage sooner than your peers. In fact, you can shed 3-4 years, or more, off your financial commitment. If you plan on doing some traveling upon retirement, for example, those few extra years of savings can truly pay off. Of course, as mentioned above, you’ll also enjoy the luxury of paying less in interest.

Regardless of where you stand today, you can always make grand plans for the future – and it only takes a small increment to enjoy some benefits down the road. Homeownerships is an investment, and if you’re willing to maximize your wealth, this is one tremendous way to do it.

The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

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