Big Interest Savings: Available to Anyone

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make extra payments which go toward your principal. You pay more on principal in many different ways. Paying 1 additional payment one time a year is likely the simplest to track. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment in a year. Each option produces different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay more every month or even every year. Keep in mind that most mortgages will allow you to pay extra on your principal at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. If, for example, you were to receive a surprise windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly reduce the repayment period of your loan and save a huge amount on interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.

Foxfield Financial can walk you Foxfield Financial has your mortgage answers. Call us: 720-598-8300.

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