Mortgage Saving Tips
There's a trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make extra payments that are applied to your principal. You can accomplish this using a few different techniques. Making one extra payment once every year is perhaps the simplest to arrange. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each of these options yields different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some borrowers can't manage extra payments. Keep in mind that virtually all mortgages will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay down your principal when you get some extra money.
If, for example, you were to receive a large gift or tax refund four years into your mortgage, you could pay a portion of this windfall toward your loan principal, which would result in enormous savings and a shorter payback period. Unless the mortgage loan is very large, even modest amounts applied early can yield huge savings over the life of the loan.
America's Money Source can walk you the mortgage process. Give us a call at 4078987559.