Save Big on Your Mortgage
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There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which are applied toward your loan principal. You can do this in various ways. For many people,Perhaps the easiest way to keep track is by making 1 extra mortgage payment a year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every other week. The effect here is that you make one additional monthly payment each year. Each of these options yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
One-time Additional Payment
Some borrowers just can't make extra payments. But it's important to note that most mortgages will allow additional payments at any time. You can take advantage of this provision to pay down your principal any time you get some extra money. If, for example, you were to receive a very large gift or tax refund four years into your mortgage, you could apply this money toward your loan principal, resulting in significant savings and a shorter payback period. For most loans, even this small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.
Opportunity Funding has your mortgage answers. Give us a call at (888) 833-5192.