Additional Payments Yield Huge Mortgage Savings
Paying consistent extra payments toward the principal provides big savings. Borrowers make this happen in a few ways. Making 1 extra full payment once a year is likely the simplest to keep track of. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment each year. Each of these options produces different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
Some people can't manage any extra payments. Remember that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. You can benefit from this rule to pay down your principal any time you get some extra money.
If, for example, you receive an unexpected windfall four years into your mortgage, you could pay a portion of this money toward your loan principal, which would result in enormous savings and a shortened loan period. For most loans, even this relatively modest amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
Savers Home Loans can walk you Savers Home Loans can answer questions about these interest savings and many others. Give us a call: (800) 974-0509.