Additional Payments Provide Huge Mortgage Savings
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There's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make additional payments which go toward your principal. Borrowers make this happen in a few ways. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment a year. However, some people won't be able to swing such a large additional expense, so dividing one extra payment into 12 additional monthly payments is a great option too. Another popular option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment in a year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
Some folks just can't make any extra payments. But remember that most mortgage contracts allow additional payments at any time. Any time you get some unexpected cash, you can use this provision to pay an additional one-time payment toward principal.
If, for example, you were to receive an unexpected windfall four years into your mortgage, paying several thousand dollars into your mortgage principal can reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the duration of the loan. For most loans, even a small amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
At Evans Mortgage Company, we answer questions about money-saving strategies every day. Call us at 916-731-4405.