Mortgage Saving Tips
Making consistent extra payments on your loan principal yields big savings. Borrowers can do this in several ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment per year. However, some people will not be able to afford such an enormous extra expense, so splitting a single additional payment into 12 additional monthly payments works too. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment each year. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
One-time Additional Payment
Some borrowers can't manage extra payments. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you come into extra cash, consider using this rule to pay a one-time additional payment on your principal. If, for example, you were to receive a surprise windfall four years into your mortgage, paying a few thousand dollars into your home's principal can significantly reduce the period of your loan and save a huge amount on mortgage interest over the life of the loan. For most loans, even this small amount, paid early in the mortgage, could offer big savings in interest and in the duration of the loan.
Tenby J. Dahman can walk you At Tenby J. Dahman, we answer questions about money-saving strategies almost every day. Call us at 3038627760.