Simple Ways to Save on Your Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that apply toward the loan principal. Borrowers use different methods to accomplish this goal. Making a single additional payment one time per year may be the simplest to arrange. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment every year. Each option produces different results, 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.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can benefit from this provision to pay extra on your principal when you come into extra money.
Here's an example: a few years after buying your home, you receive a huge tax refund,a very large legacy, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can shorten the duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
Crown Mortgage can walk you At Crown Mortgage, we answer questions about interest-saving strategies almost every day. Call us: (434) 975-5626.
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