Additional Payments Provide Huge Savings

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Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make additional payments which apply toward your principal. Borrowers accomplish this goal in a few different ways. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment a year. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment every year. Each option produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

Additional One-time payment

Some borrowers can't manage any extra payments. Keep in mind that almost all mortgage contracts will allow you to pay extra on your principal at any time. Any time you come into unexpected money, consider using this provision to make an additional one-time payment toward mortgage principal. If, for example, you receive an unexpected windfall just a few years into your mortgage, paying a few thousand dollars into your home's principal can reduce the repayment period of your loan and save enormously on mortgage interest over the duration of the loan. For most loans, even this modest amount, paid early in the loan period, could offer big savings in interest and duration of the loan.

Paul M. Johnson - Mortgage Banker can walk you through the pitfalls of getting a mortgage. Call us: 512-326-2186.