Mortgage Savings

There's a trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make additional payments which go toward your principal. People accomplish this goal in several different ways. Making one additional full payment once every year is perhaps the simplest to keep track of. Of course, some people won't be able to pull off such a large extra payment, so splitting a single additional payment into 12 additional monthly payments works too. 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. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgages will allow additional payments at any time. You can benefit from this rule to pay down your mortgage principal any time you get some extra money. If, for example, you receive a surprise windfall three years into your mortgage, paying several thousand dollars into your mortgage principal can significantly reduce the duration of your loan and save enormously on interest over the duration of the mortgage loan. For most loans, even this relatively modest amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.

1st Credential Mortgage Inc can walk you 1st Credential Mortgage Inc has your mortgage answers. Give us a call: (281) 778-0805.

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