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In today's economy, people are looking to save every penny they can. They will work their hardest to cut a dollar here, fifty cents over there, but what many people do not realize is that by doing just a little bit of math, they can potentially save themselves hundreds of thousands of dollars, simply by choosing a different length of time on their mortgages..
Gay realtor reports that simply by choosing a mortgage paid in a shorter amount of time, an individual will potentially save tens or hundreds of thousands of dollars on interest paid to the bank..
To calculate interest, one must use the formula, I = P * r * t..
In this example, an individual is purchasing a million-dollar home at a rate of 5.0%. He must now decide on whether he wants a mortgage lasting 15 years or 30 years. The interest rate on this particular home, at the given rate of 5.0%, over 30 years is 1.5 million dollars. He will, in fact, be paying more than double the original cost of his home, most of his money going to the bank, in order to pay off this loan..
Now, gay realtor reports if this individual instead decided on a 15 year loan at the same rate, his interest will be only total 750,000 dollars. While this is still a very large sum of money, this individual will have saved a whole 750,000 dollars by choosing the 15 year loan over the 30 year one..
In this next example, an individual is spending 200,000 dollars on a house at a 6 percent interest rate. Again, as the formula for interest is I = P * r * t, the total interest paid by this individual will be 200,000 * .06 * 30 for a 30 year mortgage, or 360,000 dollars. It will be as if he is paying for his home twice over the span of 30 years, simply to pay off his mortgage. Now, if he were to instead choose a 15 year mortgage at the same rate and for the same house, he would save 180,000 dollars, nearly the cost of his house..
Gay realtor emphasizes the huge benefits of a 15 year mortgage over a 30 year mortgage, cutting the total amount of interest paid to the bank in half! If you’d like help with figuring your savings, just contact any of the mortgage professionals at www.GayMortgageLoans.com..