Mortgage Saving Tips

Paying regular extra payments on the loan principal will yield singificant returns. You can accomplish this using a few different techniques. Paying 1 extra payment one time every year is likely the easiest to keep track of. But some folks won't be able to pull off such an enormous extra payment, so dividing an extra payment into twelve extra monthly payments works too. Another popular option is to pay a half payment every other week. The result is you make one additional monthly payment each year. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Additional One-time payment

Some people can't manage any extra payments. Keep in mind that most mortgages will permit you to pay extra on your principal at any time. You can benefit from this rule to pay extra on your principal when you get some extra money.

If, for example, you were to receive a very large gift or tax refund three years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly reduce the period of your loan and save enormously on mortgage interest paid 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 life of the loan.

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