Simple Ways to Save on Your Mortgage

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which go toward your loan principal. People accomplish this goal in several ways. For many people,Perhaps the simplest way to organize this process is by making one extra payment per year. Of course, many people can't afford such a large additional payment, so splitting one extra payment into 12 additional monthly payments is a fine option too. Another option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment each year. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay extra every month or even every year. But remember that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay extra on your principal any time you come into extra money. Here's an example: a few years after buying your home, you receive a huge tax refund,a very large inheritance, or a non-taxable cash gift; , you could pay a portion of this money toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively small amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.

America's Money Source can walk you through the pitfalls of getting a mortgage. Give us a call: 4078987559.