Big Interest Savings: Available to Anyone
Making consistent extra payments toward your loan principal yields singificant returns. You can accomplish this in various ways. Making 1 extra full payment once every year is probably the simplest to track. Of course, some folks will not be able to pull off such a large additional payment, so splitting a single extra payment into twelve extra monthly payments works as well. Another popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment in a year. These options differ a little in reducing the final payback amount and reducing payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
Some people just can't make extra payments. Keep in mind that most mortgages will permit you to make additional payments to your principal at any point during repayment. Whenever you get some unexpected cash, you can use this rule to pay an additional one-time payment toward your principal.
Here's an example: several years after buying your home, you get a huge tax refund,a very large legacy, or a cash gift; , you could apply this money toward your loan principal, which would result in huge savings and a shortened payback period. Unless the mortgage loan is quite large, even modest amounts applied early can produce huge savings over the life of the loan.
Creative Mortgage Lenders can walk you Creative Mortgage Lenders has your mortgage answers. Call us at 727-822-2222.