Save Big on your Mortgage

There's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which are applied toward the loan principal. Borrowers use different methods to accomplish this goal. Making one additional payment one time per year may be the simplest to track. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.

Lump-sum Additional Payment

Some people can't manage any extra payments. But you should remember that most mortgage contracts allow you to make additional principal payments at any time. You can take advantage of this provision to pay down your principal when you get some extra money. If, for example, you receive a surprise windfall just a few years into your mortgage, you could apply this windfall toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.

Forum Mortgage Bancorp can walk you Forum Mortgage Bancorp has your mortgage answers. Give us a call: (773) 774-9040 Ext 121.

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