Dmitry Furman's Home Trends

DMITRY FURMAN

PAYING DOWN YOUR MORTGAGE FASTER When you own a home, making a regular mortgage payment is something you’re going to be doing for a long time. Thankfully, there are a few things you can do to help cut down the length of time it takes to pay off your mortgage and in turn how much you pay in interest. Any additional payments you make towards your mortgage, whether they are lump sum payments or additions to your monthly payment, go straight to your principal amount. That means you not only pay less in interest, but also cut down on the total length of time you’re making payments. Most lenders set guidelines as to how much of a lump sum payment you can make – typically it’s a percentage of the amount remaining, so check with your lender if you come into some unexpected cash and want to put it towards your mortgage. Another smaller way to pay off your mortgage faster is to accelerate your payments or round up the amount. For example, if your mortgage payment is $984 a month, adding an extra $16 to make the payment an even $1,000 would go directly towards the principal amount. Making accelerated payments (essentially a 13th monthly payment each year) also helps in the long run. Talk to your lender to see what options are available to you as you should be able to change your payment frequency or add a lump sum (within the guidelines set out in your mortgage) at any time throughout the year.

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