Save on your Mortgage Loan
Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which apply toward the loan principal. You can do this in several ways. Paying a single extra payment once every year is perhaps the simplest to arrange. However, some people won't be able to pull off such an enormous additional expense, so dividing an extra payment into twelve extra monthly payments is a fine option too. Another option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment each year. These options differ slightly in lowering the total interest paid 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.
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 additional payments at any time. You can take advantage of this rule to pay extra on your mortgage principal when you get some extra money. Here's an example: several years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shortened payback period. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.
Ward Kilduff Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at (860) 658-7100.
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