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 extra payments which are applied to the loan principal. People pay extra in a few different ways. Making 1 additional full payment once per year may be the simplest to arrange. But many folks won't be able to afford this huge additional expense, so splitting one additional payment into 12 additional monthly payments is a great option too. Finally, you can pay a half payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts allow additional principal payments at any time. Whenever you get some unexpected money, you can use this provision to make a one-time additional payment toward principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, investing several thousand dollars into your home's principal can shorten the repayment period of your loan and save a huge amount on interest over the duration of the mortgage loan. For most loans, even this relatively small amount, paid early 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. Give us a call at 603-893-6616.