Additional Payments Provide Huge Mortgage Savings
Paying regular extra payments toward the principal will provide huge returns. You pay against principal by employing various techniques. Making 1 additional payment one time per year is probably the simplest to arrange. But some people won't be able to swing such an enormous extra expense, so dividing an extra payment into twelve additional monthly payments works as well. Another very popular option is to pay half of your payment every other week. The result is you make one extra monthly payment each year. Each option produces slightly different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. Keep in mind that almost all mortgages will allow you to pay extra on your principal at any point during repayment. Whenever you get some extra money, you can use this provision to make an additional one-time payment toward mortgage principal. If, for example, you receive a very large gift or tax refund just a few years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
Real Property Finance can walk you Real Property Finance can answer questions about these interest savings and many others. Call us at 310-379-5997.
Do you have a question regarding a mortgage program?