Burning both ends earns benefits

Burning both ends earns benefitsThere is a popular saying “burning the candle at both ends” which we often determine to mean being an A+ personality and working harder than the average person. But what if burning both ends gives you an unexpected benefit?

Let’s use the analogy that the candle is your home mortgage and getting it paid off early or “burned out” would be a good result. One end of the candle represents your regular mortgage payment and the other represents additional principal payments.

The Great Recession taught borrowers a hard lesson. Lenders report that homebuyers on average get shorter term mortgages on their initial purchase and when refinancing. America’s homeowner mindset has shifted from the belief that they will always have a house payment to they only want to make payments for 15 years.

The extra $100, $200 or $500 buffer you might be keeping in your checking account is not earning you interest. Making additional principal payments along with your monthly payments on your fixed rate mortgage will save you interest, build equity quicker and shorten the term of your existing mortgage.

Making financially wise choices leads to good wealth management. If your retirement goal is to have your home paid off by or before you retire, then making extra principal payments each month can help you realize it.

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