Simple Ways to Save on Your Mortgage
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Paying consistent extra payments on your loan principal will provide significant returns. Borrowers can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to keep track is by making one additional payment a year. Of course, some people can't afford this huge additional expense, so splitting a single additional payment into 12 additional monthly payments is a fine option too. Another option is to pay a half payment every two weeks. The result is you make one extra monthly payment each year. Each of these options produces slightly different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. Whenever you get some extra cash, consider using this provision to make an additional one-time payment on principal. 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, resulting in huge savings and a shorter loan period. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer huge savings in interest and duration of the loan.
West Community Credit Union can answer questions about these interest savings and many others. Call us: 636-720-2432.