Mortgage Savings Tips

Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make extra payments that go toward the loan principal. Borrowers employ various techniques to meet this goal. Paying 1 extra full payment one time per year is perhaps the simplest to arrange. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will 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 more every month or even every year. Keep in mind that most mortgages will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. If, for example, you receive a surprise windfall five years into your mortgage, you could pay a portion of this money toward your loan principal, resulting in huge savings and a shortened payback period. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the life of the loan.

Executive Lending Group, LLC can walk you through the pitfalls of getting a mortgage. Call us at 8165258000.