Mortgage Saving

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There's a trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make additional payments which are applied to your loan principal. People make this happen in a few ways. Making a single extra full payment once a year is perhaps the simplest to arrange. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment in a year. Each option yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money.

For example: several years after buying your home, you receive a larger than expected tax refund,a large legacy, or a cash gift; , paying several thousand dollars into your mortgage principal will significantly shorten the repayment period of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.

First Residential Mortgage can walk you First Residential Mortgage can answer questions about these interest savings and many others. Give us a call: (831) 459-6073.