Save Big on Your Mortgage

Paying consistent additional payments toward your loan principal provides huge savings. Borrowers pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making one extra payment per year. Of course, many people won't be able to swing such an enormous additional payment, so dividing one additional payment into 12 additional monthly payments is a fine option too. Another popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment each year. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay extra every month or even every year. But remember that most mortgages allow you to make additional principal payments at any time. Whenever you get some unexpected money, consider using this rule to make an additional one-time payment toward your mortgage principal. If, for example, you were to receive a very large gift or tax refund just a few years into your mortgage, paying several thousand dollars into your home's principal will significantly reduce the duration of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this small amount, paid early enough in the loan period, could offer big savings in interest and duration of the loan.

1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call: (281) 778-0805.

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