Big Savings on Interest: Available to Anyone with a Mortgage

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that apply to your loan principal. People pay extra in several ways. For many people,Perhaps the simplest way to keep track is by making one additional payment per year. Of course, many folks won't be able to swing such an enormous extra payment, so dividing one extra payment into 12 extra monthly payments works as well. Another popular option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.

Lump-sum Additional Payment

Some borrowers can't manage any extra payments. But remember that most mortgage contracts will allow additional principal payments at any time. You can take advantage of this rule to pay down your principal when you come into extra money. If, for example, you receive a surprise windfall just a few years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shortened payback period. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge benefits over the life of the loan.

Hawk Mortgage Group can walk you Hawk Mortgage Group has your mortgage answers. Give us a call at (443) 619-7900.

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