Mortgage Savings Tips
Paying consistent extra payments toward the principal balance can yield huge savings. People make this happen in several ways. Paying one extra full payment one time every year is likely the easiest to keep track of. If you can't pay an additional 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 other week. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgages will permit you to pay extra on your principal at any point during repayment. Any time you come into unexpected cash, you can use this provision to make an additional one-time payment toward principal. Here's an example: five years after moving into your home, you get a huge tax refund,a very large inheritance, or a cash gift; , investing several thousand dollars into your home's principal will significantly reduce the duration of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. For most loans, even a relatively modest amount, paid early 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: 504-866-5626.
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