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Unorthodox Way to Pay Off Loan Early

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In order to save some cash over the life of your mortgage, you may consider taking out a bigger loan than you need and making one large, lump-sum payment toward the principal immediately after closing.

By doing this, you will shorten the term of your loan and lower your interest payments.

Borrowing $300,000, for example, as opposed to the $280,000 you really need means you will have a higher required monthly payment. With the combination of the large chunk paid toward principal off the bat ($20,000 in this case), and the higher monthly payments, you will pay off the loan in less time.

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