Additional Payments Provide Big Savings

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 which are applied toward your loan principal. Borrowers make this happen in a few ways. Paying 1 additional payment one time a year is likely the simplest to track. But many people can't afford such an enormous additional expense, so dividing a single extra payment into 12 additional monthly payments works too. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.

Additional One-time payment

Some folks just can't make any extra payments. But remember that most mortgage contracts will allow additional principal payments at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money.

Here's an example: a few years after buying your home, you receive a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal will shorten the repayment period of your loan and save enormously on mortgage interest over the life of the loan. Unless the loan is quite large, even small amounts applied early in the loan period can yield huge benefits over the life of the loan.

The Mortgage Partner can walk you through the pitfalls of getting a mortgage. Call us at 8888107112.

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