Simple Ways to Save on Your Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments that are applied toward your loan principal. Borrowers pay extra on principal in various ways. Paying 1 extra payment one time per year is perhaps the simplest to keep track of. But many people will not be able to swing such a large extra expense, so splitting one additional payment into twelve additional monthly payments is a great option too. Finally, you can commit to paying a half payment every two weeks. Each of these options yields different results, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
One-time Additional Payment
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgages allow additional principal payments at any time. Whenever you come into extra cash, you can use this provision to make a one-time additional payment toward your principal.
Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal can significantly shorten the period of your loan and save enormously on interest over the life of the loan. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you through the pitfalls of getting a mortgage. Call us at 214-300-8756.