Mortgage Savings Tips
There's a trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments which apply toward your principal. Borrowers accomplish this goal in several ways. Making a single extra full payment one time a year is perhaps the easiest to track. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in reducing the total interest paid and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. Remember that almost all mortgages will allow you to pay extra on your principal at any point during repayment. Any time you get some extra money, you can use this provision to pay a one-time additional payment toward your mortgage principal.
Here's an example: a few years after buying your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could pay this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. Unless the mortgage loan is quite large, even small amounts applied early can yield huge benefits over 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.