Extra Payments Provide Huge Mortgage Savings
Paying regular additional payments toward your principal will yield significant savings. You can pay more on principal by employing various techniques. For many people, Perhaps the easiest way to organize this process is to make one additional payment every year. However, some folks will not be able to pull off such a large extra payment, so dividing one extra payment into 12 additional monthly payments works too. Finally, you can pay half of your mortgage payment every other week. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages will allow additional payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money.
If, for example, you receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your home's principal will significantly reduce the duration of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
Have a question? Schedule a call with a loan officer