Big Savings on Interest: Available to Anyone

Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments that are applied toward your principal. Borrowers can pay more on principal by employing various techniques. Making 1 additional full payment one time a year is perhaps the easiest to keep track of. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgage contracts will allow additional principal payments at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money.

If, for example, you were to receive a large gift or tax refund four years into your mortgage, you could pay a portion of this money toward your loan principal, resulting in enormous savings and a shortened loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.

Tenby J. Dahman The Dahman Team can walk you Tenby J. Dahman The Dahman Team has your mortgage answers. Give us a call: 3038627760.