Paying regular additional payments toward your loan principal provides enormous returns. People accomplish this goal in a few different ways. For many people,Perhaps the simplest way to organize this process is to make one additional mortgage payment every year. 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 pay that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment each year. These options differ slightly in lowering the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay down your principal every month or even every year. But remember that most mortgages will allow you to make additional payments at any time. You can take advantage of this rule to pay down your mortgage principal any time you come into extra money.
If, for example, you receive a very large gift or tax refund five years into your mortgage, paying several thousand dollars into your mortgage principal can significantly shorten the period of your loan and save enormously on interest paid over the duration of the loan. Unless the loan is quite large, even modest amounts applied early in the loan period 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 8165258000.
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