Huge Savings on Interest: Available to Anyone
Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which are applied to your principal. You pay more on principal in various ways. Paying one additional full payment one time a year is probably the easiest to keep track of. But some folks will not be able to pull off such a large additional payment, so dividing an extra payment into 12 additional monthly payments works too. Another popular option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment every year. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages allow additional principal payments at any time. You can take advantage of this provision to pay extra on your mortgage principal when you get some extra money.
If, for example, you receive an unexpected windfall just a few years into your mortgage, investing several thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even a relatively small amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
C2 Financial Corporation can walk you At C2 Financial Corporation, we answer questions about money-saving strategies almost every day. Call us at (727) 478-2797.
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