Simple Ways to Save on Your Mortgage
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There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that are applied to the principal. Borrowers accomplish this goal in several different ways. For many people,Perhaps the simplest way to keep track is to make 1 extra payment a year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow additional payments at any time. Any time you come into unexpected money, you can use this provision to make a one-time additional payment on your mortgage principal.
If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in significant savings and a shortened payback period. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge benefits over the duration of the loan.
At Bob Rutledge , we answer questions about interest-saving strategies almost every day. Call us: (314) 913-9678.