USEFUL RESOURCES

If you take out an interest only loan and then make additional payments, you might be able to save yourself some money over the long haul. If you take out a 30 year loan for $250,000.00 with a 5.000% interest rate, for example, the monthly payment would be about $1,041.67. This means you will pay $375,000.00 in interest at the end of the loan term.

If you pay an extra $50.00 per month, however, your average monthly payment will not be much more, only $1,054.27. At the end of the loan period, you will have paid $361,537.50 in interest. Since your extra payment will get your interest paid off sooner, you will save $13,462.50 in interest by paying an extra $50.00 each month. This will reduce the balance of your $250,000.00 loan to $232,000.00, which will result in $18,000.00 in loan appreciation.