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Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments which go to the principal. You pay extra on principal by employing various techniques. Making a single extra full payment once every year is perhaps the easiest to arrange. However, some folks can't afford this huge additional payment, so dividing an additional payment into twelve additional monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
One-time Additional Payment
Some borrowers can't manage extra payments. Remember that virtually all mortgages will allow you to pay extra on your principal at any time. Any time you get some unexpected cash, consider using this provision to make an additional one-time payment on your principal. For example: five years after moving into your home, you get a huge tax refund,a large inheritance, or a non-taxable cash gift; , investing a few thousand dollars into your home's principal can significantly shorten the duration of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even this small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Pacific West Lending has your mortgage answers. Give us a call: 310-534-6800.
3848 W Carson St Ste 104 Torrance, CA 90503-6704 Phone: Fax:
