Mortgage Savings Tips
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make extra payments that are applied to your principal. Borrowers can do this using a few different techniques. Paying a single additional full payment one time every year is likely the simplest to keep track of. 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. Finally, you can pay a half payment every two weeks. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
Lump Sum Extra 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 allow additional principal payments at any time. Any time you get some unexpected cash, consider using this provision to pay an additional one-time payment toward your principal.
If, for example, you were to receive an unexpected windfall just a few years into your mortgage, paying a few thousand dollars into your mortgage principal can reduce the repayment period of your loan and save enormously on interest over the duration of the loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about these interest savings and many others. Call us at (808) 935-0678.
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