Save Big on your Mortgage
Here's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments that are applied toward your principal. People use different methods to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making one extra payment every year. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment each year. These options differ slightly in lowering the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Lump Sum Extra Payment
Some folks can't manage any extra payments. But remember that most mortgages allow additional payments at any time. Any time you come into extra money, you can use this provision to pay a one-time additional payment toward your principal. If, for example, you receive a surprise windfall three years into your mortgage, you could apply this money toward your loan principal, which would result in huge savings and a shorter payback period. For most loans, even a relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
Real Property Finance can walk you the mortgage process. Give us a call: 310-379-5997.
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