Mortgage Savings Tips
Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which apply to your principal. Borrowers can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is by making one extra payment a year. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay down your mortgage principal when you get some extra money.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save enormously on interest over the life of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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