Extra Payments Yield Big Mortgage Savings
There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which are applied toward your loan principal. Borrowers pay more on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is to make one extra payment a year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you make one extra monthly payment every year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay down your principal every month or even every year. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any time. You can benefit from this provision to pay extra on your principal any time you get some extra money. If, for example, you receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your home's principal will shorten the duration of your loan and save a huge amount on interest over the duration of the loan. Unless the loan is very large, even small amounts applied early can yield huge savings over the life of the loan.
Savers Home Loans can walk you Savers Home Loans can answer questions about these interest savings and many others. Give us a call: (800) 974-0509.