June 25, 2012

free money

Although I love to post about beautiful interiors and gingham Miu Miu sling backs...

Ok, I had to see them one more time.

                                      Image via Pinterest.

I'm going to go all left-brained on you right now. Here's a visual.

                             Image via Pinterest.

I am a bargain hunter/money saver extraordinaire.  Yes, I carry a coupon book (only with realistic coupons that I will actually use) and yes, I always search for coupon codes for free shipping. Guilty. I also consider myself savvy in the finances as the budget guru of the household. Now, I hate paying interest and every time our mortgage comes in the mail I cringe over the amount of our payment that goes to interest and a tinsy wintsy amount that goes to the actual principal (we have been homeowners for about 3 years now so this massive debt amount is fresh). Major bummer. That being said we've decided to try and make an extra principal payment every month. This equals major savings over time.

{*Disclaimer* - These are my own opinions based on our personal situation. I do not claim to be a financial planner. If you have credit card debt or student loan debt that has an interest rate higher than your mortgage rate it might make sense to forgo extra payments on your mortgage and put it toward that debt. Again, this has to be tailored to your personal situation.}

Soooo upon registering our mortgage online (so that I can make payments without wasting a stamp/check/envelope - seeeeee the thriftiness?) I noticed an option for making biweekly payments.


Biweekly payments? Sounds interesting. How did I not come across this option in three years of payments? There goes the financially savvy self-proclaimed title. I called our mortgage lender to figure out the skinny on this biweekly stuff.

Apparently, you can make a half payment every two weeks and within a year of doing this you will actually end up making 1 very important extra payment to your mortgage. Imagine that over a 30 year term!??! 30 extra payments that seem relatively painless. Miss mortgage lender told me that if I enrolled in the biweekly program now that my mortgage would be paid off 6 years earlier and I would save $31,000 in interest!!!! That's like getting a Toyota for free. Or 51.6 pairs of gingham Miu Miu sling backs. Coupled with that extra payment per month and we are rolling in the savings. Your welcome 50 year old Merrick. I am totally doing this. The idea of only stomaching half of the payment at a time plus this savings is a no-brainer for me.

What do you guys think? Are you enrolled in a biweekly program?

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