Save on your Mortgage

Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which apply toward your principal. You pay more on principal in many different ways. For many people,Perhaps the simplest way to keep track is by making one extra mortgage 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 pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The result is you make one extra monthly payment every year. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgage contracts will allow additional payments at any time. You can take advantage of this provision to pay extra on your principal when you come into extra money. For example: a few years after buying your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, resulting in huge savings and a shorter payback period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.

Wisdom Financial, Inc. can walk you the mortgage process. Call us at 708.499.6088.