Save Big on Your Mortgage
There's a trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments which apply to the loan principal. You pay extra on principal in many different ways. For many people,Perhaps the easiest way to keep track is to make one extra payment a year. But many people will not be able to pull off this huge additional payment, so splitting an extra payment into twelve extra monthly payments works as well. Finally, you can pay half of your mortgage payment every other week. Each of these options produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
One-time Additional Payment
Some folks can't manage any extra payments. Remember that almost all mortgages will allow you to pay extra on your principal at any time. You can benefit from this rule to pay down your mortgage principal any time you get some extra money.
For example: five years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , paying a few thousand dollars into your home's principal can significantly shorten the repayment period of your loan and save enormously on interest paid over the life of the mortgage loan. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
Howard Financial can walk you Howard Financial can answer questions about these interest savings and many others. Call us at (610) 889-7467.