Mortgage Saving Tips

There's a trick to significantly reduce the length of your mortgage and save thousands in interest: Make extra payments that are applied toward the principal. You can pay more on principal in various ways. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment a year. However, many people will not be able to afford this huge additional payment, so splitting a single extra payment into twelve additional monthly payments works too. Another very popular option is to pay a half payment every two weeks. The result is you make one additional monthly payment in a year. Each option produces different results, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow additional principal payments at any time. You can benefit from this provision to pay extra on your principal when you come into extra money. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, investing several thousand dollars into your mortgage principal can significantly shorten the repayment period of your loan and save enormously on mortgage interest over the life of the loan. Unless the loan is very large, even modest amounts applied early can produce huge benefits over the life of the loan.

Atlantic Financial Services can walk you Atlantic Financial Services can answer questions about these interest savings and many others. Give us a call at (732) 969-9300.

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