How do you save money on your mortgage without lowering its interest rate, refinancing, or the consent or approval of your loan servicing company?
Making one extra mortgage payment a year will knock years off your mortgage and save you thousands of dollars.
The answer is easy. You pay back your loan sooner. The strategy works this way: Interest is paid over time. So take your monthly mortgage payment and divide it in half. Condition yourself to pay half of it twice a month. Now make one tiny, but crucial, change. Now make the payments every two weeks instead twice a month.
If you can set up a system of making the mortgage payment every two weeks rather than twice a month, you'll have it made. This is the method being used by "Bi-Weekly Mortgage Reduction Services" and "Bi-Weekly Mortgage Savings Programs." The difference is that when you do it yourself, you don't pay a third party unnecessary set-up costs and fees!
These "Reduction Services" and "Savings Programs" will charge you fees to "make a bi-weekly mortgage payment" for you. The enticement is that they will save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.
They tell you that they will make bi-weekly mortgage payments for you. The real story is that they are not actually making bi-weekly payments on your mortgage. They are making bi-weekly deductions from your bank account. These funds are placed into an account from which your monthly mortgage payment is made (which only takes 24 deductions - but during the course of a year 26 deductions will be made from your account). With the extra 2 deductions, the "Service" makes an additional mortgage payment. In other words, rather than making 12 mortgage payments, 13 payments are made.
Most people like you imagine that these 'service providers' are providing a special service to you that would either not be possible to get on your own or that you won't have the time or discipline to make it happen.
This is not true!
The real story is that you can easily make an additional mortgage payment each year. An easy way to do this is to have your mortgage payment automatically deducted from your account each month. The additional 1/12th payment to be applied to the principal amount automatically by your mortgage payment servicing company. At the end of 12 months, you will have made an additional payment. And you won't have to pay any fees to any "Service."
We realize we're helping you get into debt with this home loan. This tip will help you get out of debt sooner, and for less cost.
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