Mortgage Savings Tips

Making consistent additional payments on the principal will yield singificant returns. You can accomplish this in several ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment a year. If you can't afford to pay an extra whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. Each of these options yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid 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. Remember that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some extra cash, you can use this rule to pay a one-time additional payment toward your mortgage principal.

Here's an example: several years after moving into your home, you get a huge tax refund,a very large legacy, or a non-taxable cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shorter loan period. For most loans, even a relatively small amount, paid early in the loan period, could offer huge savings in interest and in 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 at 3038627760.