Mortgage Savings

Paying regular additional payments toward your principal balance will provide singificant returns. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is by making 1 additional mortgage payment a year. But some folks can't pull off such an enormous extra expense, so dividing a single extra payment into twelve extra monthly payments works too. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay down your principal every month or even every year. Remember that virtually all mortgages will permit you to make additional payments to your principal at any time. Whenever you come into unexpected money, consider using this provision to make a one-time additional payment toward your mortgage principal. Here's an example: a few years after buying your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save a huge amount on interest over the life of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.

Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Call us at 3038627760.