Simple Ways to Save on Your Mortgage

Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make additional payments that go toward your loan principal. You pay more on principal by employing various techniques. Paying a single additional full payment one time a year may be the easiest to arrange. But some people will not be able to pull off this huge extra expense, so dividing an extra payment into 12 extra monthly payments works too. Another popular option is to pay a half payment every other week. The result is you will make one additional monthly payment every year. Each option yields different results, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.

Lump-sum Additional Payment

Some people just can't make any extra payments. But it's important to note that most mortgages will allow additional payments at any time. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money. Here's an example: five years after buying your home, you receive a huge tax refund,a very large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will significantly shorten the duration of your loan and save a huge amount on interest paid over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.

Northeast Bancorp of America, Inc. can walk you Northeast Bancorp of America, Inc. can answer questions about these interest savings and many others. Call us at (440) 234-9660.

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