Save on Your Mortgage

There's a trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that apply to the loan principal. People accomplish this goal in a few different ways. For many people,Perhaps the easiest way to organize this process is by making 1 additional mortgage payment every year. If you can't afford to pay an additional whole payment in one month, you can divide your 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 every year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.

Lump-sum Additional Payment

It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any time. Any time you come into unexpected cash, consider using this provision to make an additional one-time payment toward your principal.

Here's an example: a few years after buying your home, you receive a very large tax refund,a large legacy, or a cash gift; , investing several thousand dollars into your home's principal can reduce the repayment period of your loan and save a huge amount on mortgage interest over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.

Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Call us at 3038627760.