Mortgage Savings Tips

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There's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments which apply to your principal. You can do this in various ways. Paying one additional full payment once every year is perhaps the easiest to keep track of. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The result is you make one extra monthly payment every year. These options differ slightly in lowering the total interest paid and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

Additional One-time payment

Some folks can't manage any extra payments. But it's important to note that most mortgage contracts allow additional principal payments at any time. Whenever you come into unexpected cash, consider using this rule to make a one-time additional payment toward your mortgage principal.

If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter payback period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.

Western Reliance Funding Group, Inc. can walk you At Western Reliance Funding Group, Inc., we answer questions about interest-saving strategies every day. Give us a call: 800.465.1404.1002.