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Small Steps to Make a Difference

Friday, March 6, 2020   /   by Soraya Joud

Small Steps to Make a Difference

In an effort to help my clients gain wealth through investing in real estate, I’m recommending checking out these options of making additional principal payments in advance.  Whether it's your own home or an investment vehicle for retirement, you want to be smart about managing your finances 

This can shorten the length of your mortgage term and allow you to build equity faster. Your additional principal payment comes directly off the rear end of the loan and your balance is paid down faster.  You'll have fewer total payments to make, in-turn leading to more savings.

This can be a dramatic improvement to financial targets, retirement plans, college fund acceleration, by shortening the life time of the mortgage and use of the future funds to save and spend on other important plans.

In the below example, an additional payment of 200 dollars to the principal on monthly basis, can shorten the life span of a 30 years mortgage by over 8 years, not to mention the savings in interest paid to the loan.

Mortgage Payoff Summary

Original term

30 Years


30 Years

Annual interest rate


Additional principal payment

$200 per month

Normal payment (PI)


Accelerated payment (PI)


Total scheduled


Total accelerated payments




Mortgage shortened by

8 years, 2 months