Simple Ways to Save Big on Your Mortgage

Making regular extra payments on the principal balance can yield singificant savings. People employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to organize this process is to make one additional payment a year. 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. Another option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment each year. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay 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. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Any time you come into unexpected money, consider using this provision to make an additional one-time payment toward your principal.

Here's an example: five years after buying your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save a huge amount on interest over the life of the mortgage loan. Unless the loan is very large, even small amounts applied early can yield huge savings over the life of the loan.

Hawk Mortgage Group can walk you At Hawk Mortgage Group, we answer questions about money-saving strategies almost every day. Give us a call: (443) 619-7900.

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