Big Interest Savings: Available to Anyone with a Mortgage
There's a trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments which apply toward the principal. Borrowers can accomplish this in various ways. Making one extra payment once every year is probably the easiest to track. If you can't pay an additional whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you make one extra monthly payment in a year. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow you to make additional payments at any time. You can benefit from this provision to pay down your mortgage principal when you come into extra money. If, for example, you were to receive a surprise windfall four years into your mortgage, investing several thousand dollars into your mortgage principal will reduce the duration of your loan and save enormously on mortgage interest over the life of the loan. For most loans, even this modest amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.
Ward Kilduff Mortgage can walk you Ward Kilduff Mortgage can answer questions about these interest savings and many others. Call us: (860) 658-7100.
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