Additional Payments Yield Big Mortgage Savings
Making consistent extra payments toward the principal yields big savings. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to organize this process is to make 1 additional mortgage payment per year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each of these options produces different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
Some people just can't make any extra payments. But it's important to note that most mortgage contracts will allow you to make additional principal payments at any time. Any time you get some unexpected money, you can use this rule to make a one-time additional payment toward your mortgage principal. If, for example, you receive a large gift or tax refund three years into your mortgage, paying a few thousand dollars into your mortgage principal can significantly reduce the repayment period of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can yield huge benefits over the duration of the loan.
Executive Lending Group, LLC can walk you Executive Lending Group, LLC has your mortgage answers. Give us a call at (816) 525-8000.
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