Mortgage Saving Tips
There's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments that are applied to your loan principal. You can pay extra on principal in various ways. Paying a single additional payment once every year may be the easiest to track. However, some people can't pull off such an enormous additional expense, so splitting a single additional payment into twelve additional monthly payments works too. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment each year. Each of these options produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
Some borrowers can't manage any extra payments. Remember that virtually all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Any time you get some extra money, you can use this provision to make a one-time additional payment toward mortgage principal.
If, for example, you receive a very large gift or tax refund just a few years into your mortgage, paying several thousand dollars into your home's principal will significantly shorten the duration of your loan and save enormously on interest paid over the life of the mortgage loan. For most loans, even this relatively modest amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
Ward Kilduff Mortgage can walk you Ward Kilduff Mortgage has your mortgage answers. Call us at (860) 658-7100.
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