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 which go toward your principal. Borrowers pay extra on principal in various ways. Paying 1 extra full payment one time every year is likely the simplest to keep track of. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly shorten 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. But you should remember that most mortgage contracts allow additional principal payments at any time. Whenever you come into extra money, you can use this rule to pay an additional one-time payment on mortgage principal. If, for example, you receive an unexpected windfall five years into your mortgage, paying a few thousand dollars into your home's principal will significantly reduce the repayment duration of your loan and save enormously on interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even small amounts applied early can produce huge benefits over the life of the loan.

Wisdom Financial, Inc. can walk you the mortgage process. Call us: 7084996088.