Additional Payments Yield Big Mortgage Savings

There's a trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that are applied to the loan principal. People accomplish this goal in a few ways. For many people,Perhaps the easiest way to keep track is to make one additional mortgage payment a year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options produces different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

Some folks just can't make extra payments. But it's important to note that most mortgages will allow you to make additional principal payments at any time. Whenever you get some extra cash, consider using this rule to pay a one-time additional payment on your mortgage principal.

Here's an example: a few years after buying your home, you get a larger than expected tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal can significantly shorten the repayment duration of your loan and save enormously on interest over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early can yield huge savings over the life of the loan.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about these interest savings and many others. Call us: 214-300-8756.