Save Big on Your Mortgage
Paying consistent extra payments toward the principal balance can yield singificant returns. Borrowers pay extra in a few ways. Making a single extra payment one time every year is perhaps the simplest to keep track of. If you can't pay an extra whole payment all at once, 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. These options differ slightly in reducing the final payback amount and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Lump Sum Extra Payment
Some folks just can't make any extra payments. Remember that virtually all mortgages will permit you to make additional payments to your principal at any time. Any time you get some unexpected cash, you can use this rule to make a one-time additional payment toward principal. If, for example, you were to receive an unexpected windfall just a few years into your mortgage, you could apply this money toward your mortgage loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about these interest savings and many others. Call us at 214-300-8756.