Are you familiar with a Qualified Mortgage (QM) and the new rules surrounding QMs beginning in early 2014? If not, you’re in the right place. Quicken Loans team members Shawn Krause, Executive Vice President of Government Relations and Amy Bishop, Deputy Corporate Counsel took the time to explain the new rules. If you’re interested in finding out about QM and how the new rules may impact you, take a look at the discussion I had with Shawn and Amy.
What if I told you that you could see just exactly how much you could save over the life of your loan with one simple calculator?
What if I said my friends bet me that I couldn’t tie a post about amortization and ESPN 30 for 30s together?
Pay up, guys.
But here’s the deal – if you have disposable income, you should strongly consider adding that extra money to your monthly mortgage payment because doing so will save you thousands of dollars in the long run.
Let me break it down for you. If you have a $200,000 loan at 5.00% on a 30-year fixed-rate loan, you’re probably looking at a monthly payment of around $1,073 (before taxes and insurance).
Over the life of your loan, you could be paying around $186,511 in interest.
If you were to add just $100 a month to your mortgage payment, you could save $37,068 in interest over the life of your loan and cut 62 months – 5 years! – clear off of your term.
Throwing your daily Starbucks addiction out the window or bringing in lunch to work every day could be the difference between tens-of-thousands of dollars over the life of your loan if you were to put those savings into your monthly mortgage payment.
Seriously. You could turn that triple extra hot caramel macchiato with extra caramel and whipped cream on the way into work everyday into some actual monetary savings instead of extra fat in your hips.
Yeah. I went there.
While you’re at it, you might want to consider refinancing your current mortgage rate to something lower than you probably ever dreamt of. Have you seen how low our mortgage rates are?
So not only could you potentially save thousands of dollars throughout your loan, you can also refinance to a lower rate on your mortgage!
You can thank me later when you’ve effortlessly saved enough money to pay for your kid’s college later on down the road.