Extra Payments Provide Huge Mortgage Savings
Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that are applied toward your principal. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment per year. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another 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. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the duration 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 will allow you to make additional principal payments at any time. Any time you come into unexpected cash, consider using this rule to pay a one-time additional payment toward mortgage principal. For example: several years after moving into your home, you get a huge tax refund,a large legacy, or a cash gift; , you could pay this windfall toward your loan principal, which would result in enormous savings and a shortened payback period. For most loans, even a relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.
Financial Edge Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 425-508-9988.
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