Save on your Mortgage Loan
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments which are applied to the loan principal. Borrowers use different methods to meet this goal. Making 1 extra payment one time per year may be the simplest to track. However, some people won't be able to afford this huge extra expense, so splitting an extra payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts will allow you to make additional payments at any time. Any time you get some unexpected cash, you can use this rule to pay an additional one-time payment on your principal. For example: several years after moving into your home, you get a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , you could apply a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
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