Simple Ways to Save Big on Your Mortgage

Here's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments which are applied toward the principal. People use different methods to meet this goal. Paying one additional full payment one time every year is probably the simplest to track. Of course, some people can't pull off this huge additional payment, so dividing one additional payment into 12 extra monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay more every month or even every year. Keep in mind that most mortgages will allow you to make additional payments to your principal at any time. Whenever you come into extra money, you can use this rule to pay a one-time additional payment toward mortgage principal. Here's an example: five years after buying your home, you receive a very large tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your home's principal will significantly shorten the repayment period of your loan and save enormously on interest paid over the life of the mortgage loan. For most loans, even this small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.

Budica Financial Corporation can walk you the mortgage process. Call us at 9518404188.