Big Savings on Interest: Available to Anyone
Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which are applied toward the loan principal. Borrowers can do this in various ways. For many people,Perhaps the simplest way to keep track is to make one extra payment every year. But some folks will not be able to pull off such an enormous additional expense, so splitting a single extra payment into 12 additional monthly payments is a fine option too. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment every year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
Some people can't manage extra payments. But it's important to note that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this provision to pay extra on your principal any time you come into extra money. Here's an example: five years after moving into your home, you receive a very large tax refund,a large legacy, or a cash gift; , you could pay a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shortened loan period. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
Savers Home Loans can walk you Savers Home Loans has your mortgage answers. Give us a call at (800) 974-0509.