Additional Payments Yield Huge Mortgage Savings
Paying consistent additional payments on the loan principal yields big returns. Borrowers can pay against principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is by making one extra mortgage payment a year. Of course, many people won't be able to swing this huge extra payment, so splitting an extra payment into twelve additional monthly payments is a fine option too. Finally, you can pay half of your mortgage payment every other week. 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.
Additional One-time payment
Some borrowers just can't make extra payments. Keep in mind that almost all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Whenever you get some extra money, consider using this provision to make an additional one-time payment on principal. If, for example, you were to receive an unexpected windfall four years into your mortgage, you could apply this money toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can walk you through the pitfalls of getting a mortgage. Give us a call: 214-300-8756.