Mortgage Savings Tips

Paying consistent additional payments on your principal will provide significant returns. You pay more on principal by employing various techniques. Making one additional full payment once every year is perhaps the easiest to arrange. If you can't pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow additional principal payments at any time. Any time you get some unexpected money, you can use this provision to make a one-time additional payment toward mortgage principal.

For example: five years after moving into your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could apply this money toward your mortgage loan principal, which would result in huge savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.