Simple Ways to Save Big on Your Mortgage
There's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which are applied toward the principal. People use different methods to accomplish this goal. Paying 1 additional payment once every year is probably the simplest to arrange. Of course, some people can't pull off such a large additional payment, so splitting one additional payment into 12 extra monthly payments works as well. Another option is to pay a half payment every two weeks. The result is you make one additional monthly payment in a year. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money.
If, for example, you receive a large gift or tax refund five years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, resulting in significant savings and a shortened loan period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.
Omni Mortgage Company, Inc. can walk you Omni Mortgage Company, Inc. can answer questions about these interest savings and many others. Give us a call: 603-893-6616.