Save on your Mortgage
There's a trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments which are applied toward your principal. People use different methods to accomplish this goal. Making 1 extra payment one time every year is likely the easiest to arrange. But many folks can't afford this huge additional expense, so dividing one extra payment into 12 extra monthly payments is a fine option too. Another popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment every year. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump-sum Additional Payment
Some borrowers can't manage extra payments. But you should remember that most mortgage contracts allow you to make additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. For example: several years after moving into your home, you receive a very large tax refund,a large inheritance, or a non-taxable cash gift; , you could pay a portion of this money toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even this modest amount, paid early in the loan period, could offer big savings in interest and length of the loan.
Alternative Mortgage Group can walk you At Alternative Mortgage Group, we answer questions about money-saving strategies almost every day. Give us a call at 561-395-4264.