Mortgage Saving Tips
Accelerate Your Mortgage Payoff: Save Money with Additional Payments
Welcome to our Mortgage Saving Tips page, where we'll explore the power of making additional payments to save money on your mortgage. By employing this smart strategy, you can reduce your mortgage term, save on interest costs, and achieve financial freedom sooner than you might have imagined.
Understanding Additional Payments:
Additional payments refer to any amount you pay toward your mortgage principal on top of your regular monthly payments. These extra payments can be made at any time during the life of your mortgage and can significantly impact your financial future.
The Benefits of Making Additional Payments:
1. Reduced Interest Costs: Every dollar you put toward your mortgage principal early on saves you money in interest over the long term. By making additional payments, you'll reduce the total amount of interest paid throughout the life of the loan.
2. Shortened Loan Term: As you consistently make extra payments, your mortgage balance decreases more rapidly. This means you'll reach the payoff point sooner, potentially shaving years off your mortgage term.
3. Build Home Equity Faster: Additional payments accelerate your home equity growth. Increased equity can open up new financial opportunities and provide a safety net during unexpected circumstances.
How to Make Additional Payments:
1. One-Time Lump Sum: If you come into a windfall, such as a work bonus, tax refund, or an inheritance, consider using a portion of it as a lump sum payment toward your mortgage principal.
2. Monthly Contributions: Allocate a specific amount each month, on top of your regular mortgage payment, to go directly toward reducing your principal balance.
3. Bi-Weekly Payments: Split your monthly mortgage payment into two half-payments and submit them every two weeks. This method results in 26 half-payments annually, which is equivalent to 13 full monthly payments. This extra payment each year can make a significant difference.
4. Use Spare Change: Round up your mortgage payment to the nearest hundred or even thousand and put the additional amount toward your principal.
Things to Consider:
1. Check for Prepayment Penalties: Before making extra payments, review your mortgage agreement to ensure there are no prepayment penalties that could offset potential savings.
2. Specify Extra Payment to Principal: When submitting an additional payment, ensure that the funds are applied directly to the principal balance and not to the next month's payment.
Track Your Progress:
Stay motivated by monitoring your progress. Many mortgage providers offer online portals where you can track your mortgage balance and see how additional payments impact your loan term and interest savings.
Consult with Us:
At Contemporary Mortgage Services, Inc., our team of mortgage experts is ready to assist you in understanding the benefits of making additional payments and creating a customized plan to help you achieve your financial goals. Whether you're a first-time homebuyer or a seasoned homeowner, we're here to provide guidance and support on your mortgage journey, even long after you close on your mortgage.
Reach out to us at 407-834-3377 to learn more about mortgage saving tips and how additional payments can be a game-changer on your path to financial success. Let's work together to secure your financial future!