Save Big on your Mortgage
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There's a trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments that apply to your principal. Borrowers employ various techniques to accomplish this goal. Making one additional full payment one time every year is perhaps the simplest to track. 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. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any time. Whenever you get some unexpected money, consider using this provision to make an additional one-time payment toward your mortgage principal.
Here's an example: five years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in significant savings and a shorter payback period. Unless the loan is very large, even small amounts applied early can yield huge savings over the life of the loan.
Tigers Community Credit Union can get you past the pitfalls of getting a mortgage. Call us at 573-443-8462.