Extra Payments Yield Big Mortgage Savings
Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which go to the principal. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment a year. However, some people won't be able to pull off such a large additional payment, so splitting a single additional payment into 12 extra monthly payments works as well. Finally, you can commit to paying a half payment every two weeks. Each option produces different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. Remember that most mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra cash, you can use this rule to make a one-time additional payment toward your mortgage principal.
If, for example, you were to receive an unexpected windfall just a few years into your mortgage, paying a few thousand dollars into your mortgage principal will significantly reduce the duration of your loan and save a huge amount on interest over the life of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
MidTowne Mortgage can walk you At MidTowne Mortgage, we answer questions about interest-saving strategies almost every day. Call us: (478) 746-2063.