A mortgage is the biggest debt most of us will ever acquire in our lifetime however it can be reduced with these few tips.  Some are quite aggressive and we think the rewards are well worth it.

Tip #1) Pay your payment early rather than late.  Most loans are calculated on a per diem rate.  This means that your loan will charge you for every day you use the money in that month at the rate of the current balance.  The math looks like this:Principle Balance of $225,000 x interest rate 5% divided by 12 and then by 30 days = $31.25 and you have the daily rate of interest factor.  Then you simply multiply the number of days in between payments by the factor. 30 x $31.25 = $937.50 but if you paid 5 days early $31.25 x 5 = you would save $156.25 and when you pay less interest your balance goes down. Every time the balance is reduced you start with a lower bench mark. Remember: Balance x Rate divide by 360 (12 months x 30 days) and you will get your per diem. Then the per diem x the number of days in between payment.

(more…)