Big Savings on Interest: Available to Anyone
Making regular extra payments toward your loan principal can yield enormous savings. You can do this in several ways. Making 1 additional full payment one time every year is likely the simplest to track. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each of these options yields slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Lump-sum Additional 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 allow you to make additional payments to your principal at any time. Any time you get some unexpected money, you can use this provision to pay a one-time additional payment toward mortgage principal.
If, for example, you were to receive a surprise windfall four years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. Unless the loan is very large, even small amounts applied early can yield huge benefits over the duration of the loan.
Tenby J. Dahman The Dahman Team can walk you the mortgage process. Give us a call at 3038627760.