Simple Ways to Save on Your Mortgage

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Making consistent extra payments toward your loan principal can yield huge returns. Borrowers can pay against principal by employing various techniques. Paying one extra payment once per year may be the simplest to keep track of. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each option produces slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

Some people can't manage any extra payments. But it's important to note that most mortgages will allow additional principal payments at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money. If, for example, you receive an unexpected windfall four years into your mortgage, you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shortened payback period. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.

City Star Lending can walk you through the pitfalls of getting a mortgage. Call us: (512) 577-6222.

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