Simple Ways to Save on Your Mortgage
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Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments that apply to the principal. Borrowers use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make 1 extra mortgage payment per year. However, some people won't be able to pull off such an enormous extra payment, so dividing an additional payment into twelve additional monthly payments works as well. Another option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment each year. Each option produces different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
One-time Additional Payment
It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow you to make additional principal payments at any time. You can take advantage of this rule to pay down your mortgage principal when you get some extra money. If, for example, you receive a large gift or tax refund five years into your mortgage, you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shorter payback period. Unless the loan is quite large, even small amounts applied early in the loan period can yield huge benefits over the duration of the loan.