Simple Ways to Save on Your Mortgage
There'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 apply to your principal. Borrowers employ various techniques to accomplish this goal. Making one additional payment once per year is perhaps the simplest to keep track of. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. These options differ a little in lowering the total interest paid and shortening payback length, 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
It may not be possible for you to pay more every month or even every year. Keep in mind that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. Whenever you come into unexpected cash, consider using this provision to make a one-time additional payment toward mortgage principal.
Here's an example: several years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, resulting in significant savings and a shorter loan period. For most loans, even a modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
Omni Mortgage Company, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 603-893-6616.