Big Savings on Interest: Available to Anyone with a Mortgage

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There's a trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make extra payments that go to the loan principal. Borrowers use different methods to meet this goal. Making 1 extra payment one time a year may be the easiest to keep track of. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each of these options yields different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts allow additional payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money. Here's an example: five years after buying your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal can shorten the period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.

Manhattan Lending, LLC can walk you the mortgage process. Give us a call: 512.257.3749.