Huge Savings on Interest: Available to Anyone with a Mortgage
There's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that are applied to your loan principal. People employ various techniques to accomplish this goal. Making 1 extra payment one time per year is probably the easiest to keep track of. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages allow you to make additional payments at any time. Whenever you get some extra cash, consider using this provision to pay an additional one-time payment on principal.
If, for example, you were to receive an unexpected windfall four years into your mortgage, paying several thousand dollars into your home's principal can reduce the period of your loan and save enormously on interest over the duration of the loan. Unless the loan is very large, even small amounts applied early can produce huge savings over the life of the loan.
Affinity Mortgage Brokers can walk you through the pitfalls of getting a mortgage. Call us at 719-425-2226.