Save on your Mortgage
Paying consistent additional payments on the loan principal can yield huge savings. Borrowers can pay extra on principal in various ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra payment per year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment each year. Each of these options yields different results, but they will all 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
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts will allow you to make additional payments at any time. Any time you come into extra cash, consider using this provision to make an additional one-time payment on your mortgage principal.
If, for example, you were to receive an unexpected windfall five years into your mortgage, you could pay a portion of this windfall toward your mortgage loan principal, resulting in significant savings and a shorter payback period. For most loans, even this relatively modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
Tenby J. Dahman can walk you Tenby J. Dahman has your mortgage answers. Give us a call: (303) 862-7760.