Huge Interest Savings: Available to Anyone
There's a simple trick to reduce the repayment period of your mortgage and save thousands over the course of your loan: Make additional payments which are applied to your principal. Borrowers can do this in several ways. For many people,Perhaps the simplest way to keep track is by making one additional payment per year. 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. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
One-time Additional 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 principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money. If, for example, you receive a very large gift or tax refund four years into your mortgage, you could pay this windfall toward your loan principal, which would result in enormous savings and a shorter loan period. For most loans, even this modest amount, paid early in the loan period, could offer big savings in interest and 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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