Huge Savings on Interest: Available to Anyone with a Mortgage
Making regular extra payments toward the loan principal yields enormous savings. You can accomplish this using a few different techniques. Making a single extra payment one time a year is likely the easiest to keep track of. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every other week. The result is you make one extra monthly payment every year. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Lump Sum Extra 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. Whenever you get some extra cash, consider using this rule to make a one-time additional payment toward mortgage principal.
If, for example, you receive a very large gift or tax refund three years into your mortgage, paying a few thousand dollars into your mortgage principal will significantly reduce the period of your loan and save a huge amount on mortgage interest over the duration of the mortgage loan. For most loans, even this small amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
Coastal Mortgage Corp. can walk you Coastal Mortgage Corp. can answer questions about these interest savings and many others. Give us a call at 504-866-5626.
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