Save Big on your Mortgage
There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments which are applied to your principal. You can accomplish this in several ways. Paying a single additional payment once a year is perhaps the simplest to keep track of. Of course, many folks will not be able to swing this huge additional payment, so splitting a single additional payment into twelve additional monthly payments works as well. Another option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment each year. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay down your principal every month or even every year. Remember that almost all mortgages will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money. Here's an example: a few years after buying your home, you get a huge tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, which would result in huge savings and a shorter payback period. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.
Tenby J. Dahman can walk you Tenby J. Dahman has your mortgage answers. Give us a call at 3038627760.