Mortgage Savings Tips

Paying regular additional payments on the principal balance provides enormous returns. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. Each option produces different results, but each will significantly reduce 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. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money.

For example: five years after buying your home, you get a very large tax refund,a very large legacy, or a cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in huge savings and a shorter loan period. For most loans, even this modest amount, paid early enough in the loan period, could offer huge savings in interest and in the duration of the loan.

The Mortgage Exchange Service LLC can walk you through the pitfalls of getting a mortgage. Give us a call: 703.255-5810.

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