Mortgage Saving Tips
Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments that go toward your loan principal. You can do this in various ways. Making one additional full payment once a year is likely the easiest to track. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 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 additional monthly payment every year. Each option yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump Sum Extra Payment
Some folks can't manage any extra payments. But remember that most mortgages allow additional payments at any time. Any time you come into unexpected cash, you can use this provision to pay a one-time additional payment toward mortgage principal.
If, for example, you receive a very large gift or tax refund four years into your mortgage, investing several thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
Savers Home Loans can walk you through the pitfalls of getting a mortgage. Call us: (800) 974-0509.