Save on your Mortgage

Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which go toward the loan principal. Borrowers employ various techniques to accomplish this goal. Paying 1 additional full payment once per year is probably the easiest to arrange. If you can't 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 popular option is to pay half of your payment every two weeks. The effect here is that you will make one additional monthly payment in a year. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.

Lump-sum Additional Payment

It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgages allow additional principal payments at any time. You can take advantage of this rule to pay extra on your principal any time you come into extra money. If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could pay this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. For most loans, even a relatively modest amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.

1st Credential Mortgage Inc can walk you the mortgage process. Call us: (281) 778-0805.