Mortgage Savings Tips
Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments that go toward the loan principal. Borrowers can do this in several ways. For many people,Perhaps the simplest way to organize this process is by making one extra payment a year. If you can't afford to pay an additional 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 a half payment every other week. The effect here is that you make one additional monthly payment in a year. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you come into extra money. If, for example, you were to receive an unexpected windfall five years into your mortgage, paying several thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save enormously on interest over the duration of the loan. For most loans, even this small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Savers Home Loans can walk you through the pitfalls of getting a mortgage. Give us a call at (800) 974-0509.