Additional Payments Provide Huge Mortgage Savings

Making regular extra payments on your loan principal provides enormous savings. People accomplish this goal in several ways. Making one additional full payment one time per year is likely the easiest to track. But some folks won't be able to swing this huge additional payment, so dividing a single additional payment into 12 extra monthly payments works too. Another very popular option is to pay half of your payment every two weeks. The result is you will make one additional monthly payment every year. Each option produces different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

Some borrowers can't manage extra payments. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. Any time you come into extra money, consider using this rule to pay an additional one-time payment toward mortgage principal.

If, for example, you receive a surprise windfall five years into your mortgage, paying a few thousand dollars into your home's principal will reduce the duration of your loan and save a huge amount on interest paid over the life of the mortgage loan. Unless the mortgage loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.

Tenby J. Dahman The Dahman Team can walk you the mortgage process. Give us a call at 3038627760.