Save Big on Your Mortgage

There's a trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which go toward your principal. You can pay extra on principal by employing various techniques. Paying one extra full payment once per year is likely the easiest to keep track of. 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. These options differ slightly in lowering the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgage contracts allow you to make additional payments at any time. You can benefit from this provision to pay down your principal when you come into extra money. If, for example, you receive a large gift or tax refund three years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even this relatively small amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.

Southwest Funding #841 can walk you Southwest Funding #841 can answer questions about these interest savings and many others. Give us a call at (512) 291-6100.

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