Extra Payments Provide Huge Savings
Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which go toward the loan principal. People use different methods to meet this goal. Making 1 additional payment one time every year is likely the easiest to arrange. Of course, some folks won't be able to afford such an enormous additional payment, so dividing one additional payment into 12 extra monthly payments is a great option too. Finally, you can commit to paying half of your mortgage payment every other week. Each of these options produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
Some folks can't manage any extra payments. But remember that most mortgage contracts allow additional principal payments at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you get some extra money.
For example: a few years after moving into your home, you receive a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can shorten the repayment period of your loan and save a huge amount on interest over the life of the loan. For most loans, even a small amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.
Financial Edge Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 425-508-9988.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.