Mortgage Savings Tips

Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments that go to the principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment a year. If you can't afford to pay an additional whole payment in one month, you can divide your 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 final payback amount 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

Some folks can't manage extra payments. But remember that most mortgages allow additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money.

For 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 apply a portion of this windfall toward your loan principal, which would result in enormous savings and a shorter loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.