How A Mortgage Calculator Can Make Your Annual Bonus Count

How A Mortgage Calculator Can Make Your Annual Bonus Count



How a​ Mortgage Calculator Can Make Your Annual Bonus Count
An annual bonus can be a​ wonderful windfall at​ the​ end of​ the​ year to​ do with as​ you​ please .​
It could go into savings,​ a​ special purchase,​ paying down your credit cards or​ into your house as​ a​ prepayment on​ your loan .​
When your mortgage is​ calculated,​ either fixed or​ adjusted,​ you​ are told how much to​ pay on​ a​ monthly basis.
However,​ a​ mortgage calculator that specializes in​ additional payments will show it​ can be very much in​ your favor to​ consider this using your bonus as​ an​ additional annual payment
And you​ thought you​ were through with a​ mortgage calculator after you​ signed the​ papers on​ your house .​
The monthly payment your mortgage lender requires is​ the​ least amount you​ must pay in​ order to​ keep current on​ your mortgage .​
It doesn't mean that you​ can't pay more! If you​ have an​ annual bonus which comes in​ every year,​ then it​ is​ definitely worth investing this by paying an​ additional annual payment against the​ principal outstanding on​ your mortgage .​
Use a​ mortgage calculator to​ work out how much difference your annual bonus makes to​ your mortgage .​
Depending on​ the​ size of​ the​ annual bonus,​ and how much of​ it​ you​ want to​ use against your mortgage principal,​ you​ can save money in​ terms of​ interest you​ won't need to​ pay .​
This reduction shows up because you​ are paying the​ loan off faster that your mortgage .​
The less time you​ owe,​ the​ less interest you​ pay .​
This is​ the​ miracle of​ compound interest your bank loves working against him .​
When you​ pay ahead on​ the​ principal,​ you​ reduce the​ amount of​ interest you​ pay on​ the​ interest .​
Poor him,​ lucky you​ .​
Your mortgage calculator reveals the​ way to​ make it​ work for,​ not against you​ .​
Another option you​ need to​ consider,​ however,​ is​ whether or​ not investing the​ money in​ another way would be more beneficial .​
It might work to​ your advantage to​ build up a​ larger amount and pay in​ that lump sum,​ say every 5 years,​ for example .​
Using the​ current rate of​ interest offered for an​ investment account that can be opened with the​ amount of​ your annual bonus,​ work out how much in​ total you​ would have at​ the​ end of​ 5 years .​
Then pull up the​ additional payment mortgage calculator to​ work out what difference it​ would make to​ your loan .​
The investment account pays you​ interest,​ and so you​ will have extra money to​ pay against your principal .​
In the​ second part of​ this scenario: use the​ mortgage calculator to​ calculate the​ mortgage if​ you​ paid the​ bonus directly against the​ principal balance on​ your mortgage each year for 5 years .​
Which of​ the​ two totals works best for you​ financially? If it​ looks too good to​ be true,​ change mortgage calculators and double check .​
Which of​ them gives you​ a​ lower balance and lower mortgage term? This is​ the​ option that most effectively puts your money to​ work .​
An additional payment against your mortgage principal is​ an​ ideal way of​ investing your extra capital in​ your home .​
Use the​ mortgage calculator first however to​ determine whether this,​ or​ an​ investment account,​ is​ the​ most efficient use of​ your money.




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