Mortgage Saving Tips
|Shopping for a mortgage loan? We'll be glad to answer your questions about our mortgage offerings! Call us at 408.399.0103. Ready to begin? Apply Here.|
Making regular extra payments on the loan principal yields big returns. Borrowers can accomplish this using a few different techniques. Paying 1 extra full payment once every year is probably the simplest to arrange. However, many folks can't pull off such a large extra expense, so splitting a single additional payment into 12 additional monthly payments is a great option too. Finally, you can commit to paying a half payment every other week. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
Some people just can't make any extra payments. But it's important to note that most mortgage contracts will allow you to make additional payments at any time. Whenever you get some unexpected money, you can use this rule to make a one-time additional payment toward your principal. If, for example, you receive a very large gift or tax refund five years into your mortgage, paying a few thousand dollars into your mortgage principal can reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. Unless the loan is quite large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.