Paying regular additional payments on the loan principal yields big savings. You can accomplish this in various ways. Paying a single extra payment once a year may be the simplest to arrange. If you can't 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 popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment every year. Each of these options yields slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgages allow additional payments at any time. Any time you come into unexpected money, you can use this provision to pay a one-time additional payment on principal.
For example: a few years after moving into your home, you receive a huge tax refund,a very large legacy, or a cash gift; , investing several thousand dollars into your mortgage principal will significantly shorten the period of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. For most loans, even this relatively small 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.