Mortgage Savings Tips
Making consistent extra payments toward your principal can yield huge savings. Borrowers can pay against principal in many different ways. For many people,Perhaps the simplest way to keep track is to make 1 extra payment every year. But some folks will not be able to pull off this huge extra expense, so splitting a single additional payment into twelve additional monthly payments works as well. Another popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
Some folks can't manage any extra payments. But you should remember that most mortgages will allow you to make additional principal payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money. If, for example, you receive a large gift or tax refund three years into your mortgage, investing a few thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save a huge amount on interest paid over the duration of the loan. For most loans, even this relatively small amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
Equity Edge Mortgage, Inc. can walk you the mortgage process. Give us a call at 719-425-2226.