Extra Payments Yield Big Mortgage Savings

Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments that apply toward your loan principal. People employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is to make one extra payment per year. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.

Lump Sum Extra Payment

Some borrowers just can't make any extra payments. Remember that virtually all mortgages will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay extra on your principal any time you come into extra money.

For example: a few years after moving into your home, you receive a very large tax refund,a large legacy, or a cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in significant savings and a shortened loan period. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you At Family Mortgage Company of Hawaii, Inc. NMLS #244497, we answer questions about money-saving strategies every day. Call us: (808) 935-0678.