Save on your Mortgage

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Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments that apply to the principal. You pay more on principal by employing various techniques. Paying a single extra payment one time per year may be the simplest to keep track of. However, many people can't swing this huge additional payment, so dividing a single extra payment into twelve extra monthly payments is a great option too. Finally, you can commit to paying half of your mortgage payment every two weeks. Each option produces slightly 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 Extra Payment

Some borrowers can't manage extra payments. Keep in mind that most mortgages will allow you to pay extra on your principal at any time. Whenever you get some extra money, you can use this provision to make an additional one-time payment on your mortgage principal. If, for example, you receive a surprise windfall three years into your mortgage, investing a few thousand dollars into your mortgage principal will reduce the period of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. For most loans, even a modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.

Cypress Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 312-829-1010.