Extra Payments Provide Big Mortgage Savings
There's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that are applied toward the loan principal. Borrowers make this happen in several different ways. For many people,Perhaps the easiest way to keep track is to make 1 extra payment per year. If you can't afford to 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 other week. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
Some people can't manage any extra payments. Remember that almost all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this provision to pay down your principal any time you come into extra money.
If, for example, you were to receive a surprise windfall five years into your mortgage, investing a few thousand dollars into your home's principal will significantly reduce the duration of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even this modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Crown Mortgage can walk you Crown Mortgage has your mortgage answers. Call us at (434) 975-5626.
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