Extra Payments Provide Big Savings
Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make additional payments which go toward the loan principal. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment every year. If you can't afford to pay an extra whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each of these options yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Additional One-time payment
Some people just can't make any extra payments. But remember that most mortgages allow additional principal payments at any time. Any time you come into unexpected cash, you can use this rule to pay an additional one-time payment on your mortgage principal. Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a cash gift; , you could pay this money toward your loan principal, resulting in enormous savings and a shortened payback period. For most loans, even this small amount, paid early enough in the mortgage, could offer huge savings in interest and in the length 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 at (800) 974-0509.