Extra Payments Yield Big Savings
Making consistent additional payments toward your loan principal will provide enormous savings. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is by making one additional payment a year. Of course, many folks will not be able to afford such an enormous extra payment, so dividing a single additional payment into 12 additional monthly payments is a fine option too. Another very popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. These options differ a little in reducing the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay extra every month or even every year. But remember that most mortgages allow additional principal payments at any time. Whenever you get some extra cash, you can use this rule to make an additional one-time payment on principal. Here's an example: five years after buying your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , you could pay this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. Unless the loan is very large, even small amounts 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 at 504-866-5626.
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