Big Savings on Interest: Available to Anyone with a Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which are applied to your principal. You can pay more on principal by employing various techniques. Paying one additional full payment once every year may be the simplest to arrange. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in lowering the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgage contracts will allow additional principal payments at any time. You can benefit from this rule to pay extra on your principal when 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 apply this windfall toward your loan principal, resulting in enormous savings and a shortened payback period. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and length of the loan.
Real Property Finance can walk you At Real Property Finance, we answer questions about money-saving strategies almost every day. Call us: 310-379-5997.
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