How do I Reduce My Mortgage or Invest?
- 1). Locate all the terms and conditions of your mortgage. A mortgage loan with a term of 15 years, in the amount of $150,000 and an interest rate of 7 percent, will have monthly payments of $997.95.
- 2). Find out how much your balance will be reduced when you make your first payment. Take the loan amount of $150,000 and multiply it by the interest rate (.07), and your result should be divided by 12 months in the year. The result is $875, which represents the interest for the first month.
- 3). Subtract the interest form your standard payment of $997.95. Your balance is reduced by $122.95.
- 4). Calculate your balance if your first payment would have been $1,500, instead of $997.95. If you mailed $1,500 to your mortgage company instead of $997.95, your balance would have been reduced by $625. The amount of interest remains the same, but your balance is reduced by an additional $502.05.
- 5). Sign up for your employer's 401(k) retirement program. This will allow you to invest for your future and prepare for retirement. Once you enroll in the program, money is deducted automatically from your paycheck into the account. You determine the percent. Many employers will match the amount you invest up to a certain amount.
- 6). Speak with a financial adviser. She will map out an investment strategy for you based on your goals and objectives. In your early 20s you will probably have more of your money invested into aggressive categories or high growth. These categories are riskier, but you earn more. You can take larger risks when you are younger because you have time to make up any losses. When you are near retirement, the majority of your money will be invested in more conservative investment categories. There are no guarantees when you invest.
