Additional Payments Yield Big Savings
Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which go toward your loan principal. Borrowers can do this in various ways. Making one extra payment one time a year is perhaps the simplest to keep track of. However, some folks won't be able to swing such a large extra expense, so dividing an additional payment into twelve extra monthly payments works too. Another popular option is to pay a half payment every two weeks. The result is you will make one additional monthly payment each year. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
One-time Additional Payment
Some borrowers can't manage extra payments. Keep in mind that virtually all mortgages will permit you to pay extra on your principal at any point during repayment. Any time you get some unexpected money, consider using this provision to make an additional one-time payment on mortgage principal.
Here's an example: several years after buying your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying a few thousand dollars into your home's principal can significantly reduce the period of your loan and save a huge amount on mortgage interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
Coastal Mortgage Corp. can walk you Coastal Mortgage Corp. has your mortgage answers. Call us: 504-866-5626.
Do you have a question regarding a mortgage program?