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How to Reduce Your Mortgage: There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan's principal. Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate
One-time Payment It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift. You could apply this money toward your loan's principal, resulting in significant savings and a shorter loan period. Example: With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments. If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That's a savings of $22,832.23 in interest.
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PRC Funding Corp
8100 Penn Ave. S. #154
Bloomington, MN 55431
Phone 952-224-1600
NMLS ID: 52261
a wholly owned subsidiary of
Premier Residential & Commercial Funding Corp