Big Interest Savings: Available to Anyone

Here's a simple trick to significantly reduce the length of your mortgage and save thousands of dollars over the course of your loan: Make additional payments that apply toward your principal. Borrowers pay more on principal in various ways. Making a single extra full payment once per year may be the simplest to keep track of. If you can't pay an additional whole payment all at once, you can divide your payment by 12 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 make one extra monthly payment every year. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Additional One-time payment

It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay extra on your mortgage principal when you get some extra money. If, for example, you were to receive a large gift or tax refund just a few years into your mortgage, paying several thousand dollars into your home's principal can significantly reduce the duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. For most loans, even a small amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.

First Community Bank of Central Al. can walk you through the pitfalls of getting a mortgage. Give us a call at (334) 285-8850.

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