Extra Payments Provide Huge Mortgage Savings
Paying regular extra payments on the loan principal provides big savings. Borrowers pay extra in several different ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment a year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgages will allow you to make additional payments to your principal at any point during repayment. You can benefit from this rule to pay down your mortgage principal when you come into extra money. If, for example, you were to receive a surprise windfall five years into your mortgage, you could pay this money toward your mortgage loan principal, which would result in huge savings and a shortened loan period. For most loans, even this small amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
Real Property Finance can walk you At Real Property Finance, we answer questions about interest-saving strategies every day. Call us at 310-379-5997.
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