Mortgage Saving Tips
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Paying regular additional payments on your loan principal yields enormous savings. People pay extra in several ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra mortgage payment every year. If you can't afford to pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
Some borrowers just can't make any extra payments. Keep in mind that virtually all mortgages will permit you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your principal when you get some extra money.
If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could apply a portion of this money toward your loan principal, resulting in huge savings and a shortened payback period. For most loans, even a small amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
Eastern Michigan Bank can answer questions about these interest savings and many others. Give us a call: 810.679.2500.