Additional Payments Provide Big Savings
Making regular additional payments on your principal balance will provide singificant returns. People employ various techniques to accomplish this goal. Making one additional full payment once every year is probably the simplest to keep track of. But many folks can't afford such an enormous extra payment, so splitting a single extra payment into 12 additional monthly payments works too. Another very popular option is to pay a half payment every other week. The result is you will make one extra monthly payment in a year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
Some folks just can't make extra payments. Remember that almost all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Any time you come into unexpected money, you can use this provision to make an additional one-time payment toward principal.
If, for example, you were to receive a very large gift or tax refund just a few years into your mortgage, you could apply this windfall toward your mortgage loan principal, resulting in enormous savings and a shorter payback period. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
Professional Choice Mortgage can walk you the mortgage process. Call us: 8148613310.