Save on Your Mortgage

There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that apply to the loan principal. You pay against principal in many different ways. Making a single additional payment once a year may be the easiest to keep track of. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment in a year. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

One-time Additional Payment

Some folks can't manage any extra payments. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this provision to pay down your principal when you get some extra money.

If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, resulting in enormous 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 in the length of the loan.

1st Credential Mortgage Inc can walk you At 1st Credential Mortgage Inc, we answer questions about money-saving strategies almost every day. Call us at (281) 778-0805.

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