Big Savings on Interest: Available to Anyone with a Mortgage
There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments that apply toward the principal. Borrowers pay extra in a few ways. Making a single additional payment once per year is probably the easiest to track. However, some folks will not be able to afford this huge extra expense, so dividing a single extra payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.
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 allow additional payments at any time. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. If, for example, you receive a very large gift or tax refund just a few years into your mortgage, you could pay this money toward your mortgage loan principal, which would result in significant savings and a shorter payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
Financial Edge Mortgage Corp. can walk you the mortgage process. Call us at 425-508-9988.
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