Save Big on your Mortgage Loan

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments that go to the principal. Borrowers use different methods to meet this goal. Making a single additional payment one time a year is likely the simplest to track. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.

Additional One-time payment

It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages allow you to make additional principal payments at any time. Whenever you get some extra cash, you can use this provision to make an additional one-time payment on mortgage principal.

If, for example, you were to receive a very large gift or tax refund three years into your mortgage, investing several thousand dollars into your home's principal will significantly shorten the repayment period of your loan and save enormously on interest over the duration of the mortgage loan. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.

Wisdom Financial, Inc. can walk you Wisdom Financial, Inc. has your mortgage answers. Give us a call: 708.499.6088.