Save Big on your Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments that go toward the loan principal. Borrowers pay extra in a few different ways. Making a single additional payment one time a year is likely the easiest to arrange. If you can't pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
One-time Additional Payment
Some people just can't make extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. You can benefit from this rule to pay down your mortgage principal when you get some extra money.
If, for example, you receive a surprise windfall just a few years into your mortgage, paying several thousand dollars into your mortgage principal will reduce the repayment period of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
Wisdom Financial, Inc. can walk you Wisdom Financial, Inc. can answer questions about these interest savings and many others. Call us at 708.499.6088.