Save on Your Mortgage
Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make extra payments that go to the loan principal. Borrowers pay extra on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make one extra mortgage payment every year. Of course, some people will not be able to swing such a large extra expense, so dividing one extra payment into 12 extra monthly payments works as well. Finally, you can pay half of your mortgage payment every other week. Each option yields slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Lump-sum Additional Payment
Some folks just can't make extra payments. But you should remember that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this provision to pay extra on your principal any time you come into extra money. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal will significantly shorten the repayment duration of your loan and save a huge amount on interest over the life of the loan. For most loans, even this modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
Wisdom Financial, Inc. can walk you Wisdom Financial, Inc. has your mortgage answers. Give us a call: 708.499.6088.