Simple Ways to Save Big on Your Mortgage

Paying regular additional payments toward the principal will yield huge savings. Borrowers can do this using a few different techniques. Making a single additional full payment once a year is perhaps the simplest to track. But some folks can't afford this huge additional expense, so dividing one additional payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.

Lump-sum Additional Payment

Some folks can't manage any extra payments. But it's important to note that most mortgage contracts will allow additional payments at any time. You can take advantage of this rule to pay down your principal any time you come into extra money.

Here's an example: a few years after buying your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on mortgage interest over the life of the loan. For most loans, even a relatively modest amount, paid early in the loan period, could offer big savings in interest and length of the loan.

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