Save on Your Mortgage

There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments which apply to your principal. Borrowers employ various techniques to accomplish this goal. Making 1 additional payment once every year is perhaps the simplest to arrange. But many people will not be able to pull off this huge additional payment, so splitting one extra payment into twelve extra monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay extra every month or even every year. Remember that most mortgage contracts will permit you to pay extra on your principal at any point during repayment. Whenever you get some extra money, consider using this rule to pay a one-time additional payment toward principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could pay a portion of this money toward your loan principal, resulting in significant savings and a shorter loan period. For most loans, even this relatively small amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.

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