Save on Your Mortgage
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which go to your loan principal. People use different methods to meet this goal. Making one extra full payment one time per year is probably the easiest to keep track of. But many people will not be able to swing such an enormous extra payment, so splitting a single extra payment into twelve additional monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money.
For example: five years after moving into your home, you get a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal will shorten the period of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
America's Money Source can walk you through the pitfalls of getting a mortgage. Give us a call: (407) 898-7559.
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