Big Interest Savings: Available to Anyone

There's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments that apply to the loan principal. Borrowers can accomplish this in several ways. For many people,Perhaps the simplest way to keep track is to make one extra payment every year. But some people can't pull off this huge extra expense, so dividing one additional payment into twelve additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.

Lump-sum Additional Payment

Some borrowers can't manage extra payments. Remember that most mortgages will permit you to make additional payments to your principal at any time. You can take advantage of this provision to pay down your mortgage principal when you come into extra money. Here's an example: five years after buying your home, you get a huge tax refund,a large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal can significantly reduce the duration of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge savings over the life of the loan.

Wisdom Financial, Inc. can walk you At Wisdom Financial, Inc., we answer questions about money-saving strategies every day. Give us a call at 708.499.6088.