Extra Payments Provide Big Mortgage Savings
Here's a simple trick to reduce the repayment period of your mortgage and save you thousands of dollars in interest: Make extra payments which are applied to the loan principal. People accomplish this goal in several ways. Paying a single extra payment one time per year is likely the simplest to arrange. Of course, many folks won't be able to swing such an enormous extra payment, so splitting one additional payment into twelve additional monthly payments works too. Another very popular option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some borrowers just can't make any extra payments. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Whenever you get some unexpected money, consider using this provision to pay an additional one-time payment toward mortgage principal.
Here's an example: a few years after moving into your home, you get a huge tax refund,a very large legacy, or a cash gift; , paying several thousand dollars into your home's principal can reduce the repayment duration of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the mortgage loan is quite large, even modest amounts applied early can yield huge savings over the life of the loan.
Amortgage.com can walk you At Amortgage.com, we answer questions about money-saving strategies almost every day. Call us at 7814920796.