Additional Payments Yield Big Mortgage Savings

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Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars in interest: Make extra payments that are applied to the principal. People use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment a year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay a half payment every other week. The result is you make one additional monthly payment every year. Each option yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.

Lump-sum Additional Payment

It may not be possible for you to pay down your principal every month or even every year. Remember that virtually all mortgages will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay extra on your principal when you get some extra money.

Here's an example: a few years after moving into your home, you get a larger than expected tax refund,a large legacy, or a cash gift; , you could apply this money toward your mortgage loan principal, which would result in enormous savings and a shorter loan period. Unless the loan is quite large, even modest amounts applied early in the loan period can produce huge benefits over the duration of the loan.

Union National Mortgage Co. can walk you Union National Mortgage Co. has your mortgage answers. Call us at 513-234-4987.