Save Big on your Mortgage
Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that apply toward the loan principal. People employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making one extra payment a year. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment each year. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
Some folks just can't make extra payments. But it's important to note that most mortgage contracts will allow you to make additional principal payments at any time. Any time you come into extra cash, you can use this rule to pay an additional one-time payment on mortgage principal.
If, for example, you were to receive a very large gift or tax refund just a few years into your mortgage, investing a few thousand dollars into your home's principal will reduce the period of your loan and save enormously on mortgage interest over the life of the loan. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
America's Money Source can walk you the mortgage process. Call us at (407) 898-7559.
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