Making consistent additional payments toward the loan principal will yield big returns. Borrowers use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make 1 additional payment a year. But many folks can't afford this huge extra expense, so splitting one extra payment into 12 extra monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
Some people just can't make extra payments. But remember that most mortgages will allow additional principal payments at any time. You can benefit from this rule to pay extra on your principal any time you come into extra money.
Here's an example: several years after moving into your home, you receive a very large tax refund,a large inheritance, or a cash gift; , paying several thousand dollars into your home's principal will significantly reduce the period of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and length of the loan.
America's Money Source can walk you America's Money Source can answer questions about these interest savings and many others. Call us at (407) 898-7559.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.