Making consistent additional payments on your principal balance will yield singificant savings. Borrowers accomplish this goal in a few different ways. For many people,Perhaps the easiest way to keep track is by making one additional mortgage payment every year. 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. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ slightly in reducing the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
Some borrowers can't manage 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 provision to pay extra on your principal when you come into extra money.
If, for example, you were to receive a surprise windfall just a few years into your mortgage, you could apply this windfall toward your mortgage loan principal, which would result in huge savings and a shorter loan period. For most loans, even a modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
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