Additional Payments Yield Huge Mortgage Savings
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Making regular additional payments on the principal yields significant savings. People use different methods to meet this goal. For many people,Perhaps the easiest way to organize this process is to make 1 extra payment a year. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another option is to pay a half payment every other week. The result is you will make one extra monthly payment in a year. Each of these options yields different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.
Lump Sum Extra Payment
Some borrowers can't manage extra payments. Keep in mind that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you get some unexpected money, you can use this rule to pay an additional one-time payment on mortgage principal.
Here's an example: five years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal will significantly shorten the duration of your loan and save a huge amount on mortgage interest over the duration of the mortgage loan. For most loans, even this modest amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
Oak Mortgage Company, LLC has your mortgage answers. Call us at (856) 988-8100 x6615.