Save on Your Mortgage
Paying regular extra payments toward the principal balance can yield huge savings. Borrowers pay against principal in many different ways. Paying a single additional payment once a year is perhaps the easiest to keep track of. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments 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 extra monthly payment each year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some borrowers can't manage any extra payments. Keep in mind that most mortgages will allow you to pay extra on your principal at any time. Whenever you come into unexpected cash, consider using this provision to make an additional one-time payment on mortgage principal. Here's an example: a few years after moving into your home, you get a very large tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your home's principal can reduce the repayment duration of your loan and save enormously on mortgage interest over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
Wisdom Financial, Inc. can walk you At Wisdom Financial, Inc., we answer questions about interest-saving strategies almost every day. Call us at 708.499.6088.