Mortgage Saving Tips

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There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that apply toward your loan principal. Borrowers can pay against principal in various ways. Making a single extra payment once per year is perhaps the easiest to keep track of. If you can't afford to pay an extra whole payment all at once, you can divide your payment by 12 and write a check for that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment in a year. Each of these options yields slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.

Additional One-time payment

Some people can't manage extra payments. Keep in mind that most mortgages 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 when you get some extra money. For example: a few years after buying your home, you get a huge tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.

Steve Whittaker can walk you Steve Whittaker has your mortgage answers. Give us a call: 8007903317.