Additional Payments Yield Huge Mortgage Savings

Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments which go toward your loan principal. Borrowers make this happen in several different ways. Paying a single extra full payment once per year is perhaps the easiest to arrange. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment every year. Each of these options yields slightly different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.

Lump-sum Additional Payment

It may not be possible for you to pay more every month or even every year. But remember that most mortgages allow additional payments at any time. Any time you come into extra cash, consider using this rule to make an additional one-time payment toward your principal. For example: several years after buying your home, you get a huge tax refund,a very large inheritance, or a cash gift; , you could pay a portion of this money toward your loan principal, which would result in enormous savings and a shorter payback period. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and length of the loan.

1st Credential Mortgage Inc can walk you 1st Credential Mortgage Inc has your mortgage answers. Give us a call: (281) 778-0805.

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