Save Big on your Mortgage

There's a trick to significantly reduce the length of your mortgage and save thousands over the course of your loan: Make extra payments which are applied toward your principal. People accomplish this goal in several ways. Making one additional payment once a year is perhaps the easiest to keep track of. However, some folks won't be able to pull off such a large extra expense, so splitting an additional payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. These options differ a little in lowering 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.

Lump-sum Additional Payment

It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow you to make additional principal payments at any time. Whenever you come into extra money, you can use this rule to make an additional one-time payment toward principal. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could pay this windfall toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. For most loans, even a small amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.

Foxfield Financial can walk you At Foxfield Financial, we answer questions about money-saving strategies every day. Give us a call at 720-598-8300.

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