Additional Payments Provide Huge Mortgage Savings

Here's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which apply to the principal. Borrowers accomplish this goal in a few ways. Making one additional payment one time every year is probably the simplest to arrange. However, many folks will not be able to afford such a large additional payment, so dividing a single extra payment into 12 extra monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the life of the loan.

Lump Sum Extra Payment

Some borrowers can't manage any extra payments. But you should remember that most mortgages allow you to make additional principal payments at any time. Any time you come into extra cash, consider using this provision to pay an additional one-time payment toward your principal.

Here's an example: a few years after moving into your home, you get a very large tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your home's principal can significantly reduce the duration of your loan and save a huge amount on interest paid over the life of the mortgage loan. For most loans, even a modest amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you the mortgage process. Call us at 214-300-8756.