For most homeowners, your mortgage payment is by far your biggest monthly expense. So we think it’s completely justifiable to spend some time learning how to better manage it. In fact, don’t be surprised if this brief exercise does wonders for your budget. Let’s take a look under the hood and see whether we can find you some savings.<\/p>\n
The rule of refinancing is relatively straightforward: If you can chop a percentage point off the interest rate on your mortgage, you should consider it. However, that’s just a rule of thumb — and, as you know, we Fools never blindly follow the conventional wisdom without doing some due diligence. Do some quick calculations to confirm whether you can actually save by refinancing (and don’t forget to include fees!). Even reducing your mortgage payment by just $100 a month can save you thousands over the years.<\/p>\n
Owning a home outright can be a huge financial advantage, but there’s no rush. In most cases, you will come out ahead by sticking to a 30-year payment schedule and investing your extra money in a market-matching index fund. Calculate how much you would save by paying off your loan early, and then compare your savings with how much your extra payments could earn if invested in an index fund earning 6%-8%.<\/p>\n