Extra Payments Yield Huge Mortgage Savings
Making regular additional payments on the loan principal will provide huge returns. Borrowers can pay against principal in various ways. For many people,Perhaps the easiest way to keep track is to make one extra payment per year. If you can't afford to pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each option produces different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgages will permit you to make additional payments to your principal at any time. Any time you come into extra money, you can use this provision to pay a one-time additional payment on mortgage principal. If, for example, you were to receive a large gift or tax refund five years into your mortgage, you could pay a portion of this windfall toward your loan principal, which would result in huge savings and a shorter loan period. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.
Professional Choice Mortgage can walk you the mortgage process. Give us a call at 814-861-3310.