Save Big on Your Mortgage
Paying consistent additional payments on the loan principal can yield singificant returns. Borrowers accomplish this goal in a few different ways. Paying 1 extra full payment one time every year is perhaps the simplest to keep track of. But some people will not be able to pull off such a large extra expense, so splitting a single additional payment into twelve additional monthly payments is a great option too. Another very popular option is to pay half of your payment every two weeks. The result is you will make one additional monthly payment every year. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts will allow you to make additional principal payments at any time. You can benefit from this provision to pay extra on your principal when you come into extra money. Here's an example: a few years after buying your home, you get a larger than expected tax refund,a large inheritance, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in enormous savings and a shortened loan 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.
America's Money Source can walk you America's Money Source can answer questions about these interest savings and many others. Give us a call at 4078987559.