Additional Payments Provide Huge Mortgage Savings
There's a simple trick to significantly reduce the length of your mortgage and save thousands in interest: Make additional payments which are applied to your principal. Borrowers can pay against principal by employing various techniques. Making 1 additional full payment one time a year is likely the easiest to track. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a year. These options differ a little in reducing the total interest paid and shortening payback length, 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 down your principal every month or even every year. Keep in mind that most mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you come into unexpected cash, you can use this provision to pay a one-time additional payment on your mortgage principal. For example: five years after moving into your home, you get a very large tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your mortgage principal will shorten the duration of your loan and save enormously on interest paid over the life of the loan. Unless the loan is quite large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
Coastal Mortgage Corp. can walk you the mortgage process. Give us a call: 504-866-5626.
Do you have a question regarding a mortgage program?