Big Savings on Interest: Available to Anyone with a Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments which go to the loan principal. You can pay against principal by employing various techniques. Paying a single additional payment once a year is perhaps the easiest to track. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some borrowers can't manage extra payments. Remember that most mortgages will allow you to pay extra on your principal at any time. Whenever you get some extra money, you can use this provision to make an additional one-time payment toward principal. If, for example, you receive a large gift or tax refund three years into your mortgage, investing several thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.
Coastal Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Give us a call: 504-866-5626.
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