Mortgage Saving Tips
There's a trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments that apply to the loan principal. You can do this using a few different techniques. Paying 1 additional full payment once a year is probably the simplest to track. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. Each of these options produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgage contracts allow additional payments at any time. Any time you come into unexpected money, you can use this rule to make a one-time additional payment on your mortgage principal. For example: five years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on interest over the life of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
Evolution Mortgage Inc. can walk you At Evolution Mortgage Inc., we answer questions about money-saving strategies every day. Call us: 631-273-1188.
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