Mortgage Saving Tips
Paying consistent extra payments on the principal balance provides enormous savings. Borrowers pay more on principal in various ways. Making 1 extra payment once a year is perhaps the simplest to arrange. However, some folks won't be able to pull off this huge additional payment, so splitting one additional payment into twelve extra monthly payments works as well. Another option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment in a year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts will allow additional payments at any time. Any time you get some extra money, you can use this provision to pay a one-time additional payment on mortgage principal. If, for example, you receive a large gift or tax refund three years into your mortgage, you could apply this money toward your mortgage loan principal, resulting in huge savings and a shortened payback period. For most loans, even a relatively small amount, paid early in the loan period, could offer big savings in interest and length of the loan.
Ward Kilduff Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (860) 658-7100.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.