Simple Ways to Save on Your Mortgage
There'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 which are applied to your principal. You can do this in several ways. Making 1 extra payment one time every year is likely the simplest to track. However, some folks can't swing this huge extra expense, so dividing a single additional payment into twelve additional monthly payments works too. Finally, you can commit to paying a half payment every other week. These options differ a little 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 just can't make extra payments. But remember that most mortgage contracts will allow additional payments at any time. Any time you get some unexpected money, you can use this provision to make an additional one-time payment on principal.
If, for example, you were to receive a large gift or tax refund just a few years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in enormous savings and a shortened loan period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.
Wisdom Financial, Inc. can walk you At Wisdom Financial, Inc., we answer questions about money-saving strategies every day. Give us a call: 708.499.6088.