One Simple Way to Save on Your Mortgage
Here’s a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments that go toward your principal. You can pay more on principal in various ways. Making a single additional payment one time per year is probably the easiest to arrange. If you can’t pay an extra whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
One-time Additional Payment
Some borrowers can’t manage extra payments. But remember that most mortgages allow additional payments at any time. Any time you come into unexpected cash, you can use this rule to make an additional one-time payment on principal.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, you could pay this windfall toward your loan principal, which would result in significant savings and a shortened payback period. For most loans, even a modest amount, paid early in the loan period, could offer huge savings in interest and length of the loan.
ATLANTIC COAST MORTGAGE GROUP, INC. can walk you through the pitfalls of getting a mortgage. Give us a call: (843) 444-LOAN (5626).