For those who are disciplined…..

Mortgage refinance comes with somewhat of a hassle and a cost to do so.  That said, if you are disciplined, you can ‘refinance’ on your own.  Although it’s really not considered refinancing, in the end, you do lower your interest rate while you do it, as well as saving mortgage interest cost (depending on what you are paying toward principal.

How it works……   Pay towards the ‘principal only’ on your own.  Decide on a sum of money and call your mortgage lender telling them to put the amount you choose towards principal only.  Doing this, will, in theory, will for that time frame drop your interest rate, and save you the interest you’d be paying for that time frame by bypassing those months you’re paying off with the amount of money you’ve chosen.

You can either pay say an extra $100. a month each month for a year, or make a one time payment of $1,200.  Always remember to say you’re paying it towards ‘principal only’.

Any extra amount you pay towards principal only during the life of the loan, will not only lessen the amount of time on the length of the loan itself, but it will also save you the interest of the amount you choose.

Another way to shorten the length of the loan is to make bi-weekly payments.  This means you pay 1/2 of the mortgage payment every 14 days.  However, you must be very disciplined to do this).

How much you save in interest as well as how much you lessen the length of your loan depends on the amount of your loan, the length of the original loan, and the interest rate.

It would be wise to check with your mortgage lender and ask them to explain it for you.

It only takes a phone call and a few minutes of your time.  Well worth it.