Save Big on your Mortgage

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments that go toward the principal. Borrowers employ various techniques to meet this goal. Making one extra payment one time a year is probably the easiest to arrange. But many people can't swing this huge extra payment, so splitting one additional payment into twelve additional monthly payments works as well. Finally, you can pay half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.

Additional One-time payment

Some people can't manage extra payments. But it's important to note that most mortgage contracts allow you to make additional payments at any time. You can take advantage of this rule to pay down your principal any time you come into extra money.

If, for example, you were to receive a surprise windfall five years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in significant savings and a shorter loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.

Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655 can walk you Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655 can answer questions about these interest savings and many others. Give us a call at (203) 526-9345.

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