Big Interest Savings: Available to Anyone with a Mortgage
Paying regular extra payments on the loan principal will yield enormous savings. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to organize this process is to make 1 additional payment per year. But many people will not be able to pull off such a large extra payment, so dividing an additional payment into twelve extra monthly payments works as well. Another popular option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment each year. Each option produces slightly different results, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some folks can't manage extra payments. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money. If, for example, you were to receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your home's principal can shorten the repayment duration of your loan and save a huge amount on interest paid over the life of the mortgage loan. For most loans, even this modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
Real Property Finance can walk you through the pitfalls of getting a mortgage. Call us at 310-379-5997.
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