Extra Payments Provide Huge Savings

Making regular extra payments toward your loan principal will provide huge returns. Borrowers accomplish this goal in several ways. Paying one additional full payment once every year is likely the easiest to track. 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 very popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower the total interest paid 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 additional principal payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you get some extra money.

If, for example, you were to receive an unexpected windfall three years into your mortgage, you could pay a portion of this money toward your loan principal, which would result in huge savings and a shortened payback period. For most loans, even a small amount, paid early in the loan period, could offer huge savings in interest and in the duration of the loan.

Channel Mortgage LLC can walk you Channel Mortgage LLC can answer questions about these interest savings and many others. Call us at (718) 639-9500.

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