Huge Savings on Interest: Available to Anyone with a Mortgage
There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make additional payments which apply toward your loan principal. You pay extra on principal by employing various techniques. Paying one extra full payment once every year may be the easiest to arrange. However, many people can't pull off this huge additional payment, so splitting an extra payment into twelve additional monthly payments works too. Finally, you can pay a half payment every two weeks. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some people just can't make extra payments. Remember that most mortgages will permit you to make additional payments to your principal at any time. Any time you come into extra money, consider using this rule to make a one-time additional payment toward your mortgage principal. If, for example, you receive an unexpected windfall five years into your mortgage, investing several thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even this modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Front Range Lending can walk you through the pitfalls of getting a mortgage. Call us at 7202537070.