Big Interest Savings: Available to Anyone
There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that are applied to your principal. Borrowers use different methods to meet this goal. Paying one additional payment one time every year is probably the easiest to keep track of. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment in a year. Each of these options produces different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow you to make additional payments at any time. Whenever you get some extra money, consider using this rule to make a one-time additional payment toward your mortgage principal. If, for example, you receive a surprise windfall three years into your mortgage, paying several thousand dollars into your home's principal will shorten the repayment period of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
Financial Edge Mortgage Corp. can walk you At Financial Edge Mortgage Corp., we answer questions about interest-saving strategies almost every day. Call us: 425-508-9988.
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