Mortgage Savings Tips
Making consistent extra payments toward the loan principal will yield huge savings. People make this happen in several different ways. Making a single extra payment once per year is likely the easiest to track. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you make one extra monthly payment in a year. These options differ a little in lowering the final payback amount 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 people just can't make extra payments. Keep in mind that almost all mortgages will permit you to pay extra on 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.
If, for example, you receive a surprise windfall four years into your mortgage, you could apply a portion of this money toward your loan principal, resulting in significant savings and a shorter payback period. Unless the loan is quite large, even small amounts applied early in the loan period can produce huge savings over the life of the loan.
Longhorn Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 512-302-9410.
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