Extra Payments Provide Big Savings

Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that apply toward the loan principal. Borrowers can do this using a few different techniques. Paying one extra full payment one time a year is perhaps the easiest to keep track of. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment every year. Each option yields different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.

One-time Additional Payment

Some folks just can't make extra payments. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any time. Any time you get some extra cash, consider using this rule to make an additional one-time payment toward your mortgage principal. Here's an example: several years after moving into your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , you could pay this money toward your mortgage loan principal, resulting in huge savings and a shorter loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.

Budica Financial Corporation can walk you through the pitfalls of getting a mortgage. Give us a call at 9518404188.