Mortgage Savings Tips
Making regular additional payments toward the principal provides huge returns. You pay against principal in many different ways. For many people,Perhaps the easiest way to keep track is by making 1 additional payment every year. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. These options differ a little in lowering the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
Some folks just can't make any extra payments. But it's important to note that most mortgage contracts will allow you to make additional payments at any time. Whenever you come into extra cash, you can use this rule to pay a one-time additional payment toward your mortgage principal. If, for example, you were to receive a surprise windfall three years into your mortgage, you could apply this windfall toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even this relatively small amount, paid early in the loan period, could offer huge savings in interest and in the length 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.