Huge Savings on Interest: Available to Anyone with a Mortgage
Making consistent additional payments on your principal yields singificant returns. Borrowers use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is to make 1 extra payment per year. However, some folks will not be able to pull off this huge extra expense, so dividing one additional payment into twelve extra monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment in a year. These options differ slightly in lowering 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.
One-time Additional Payment
Some borrowers can't manage extra payments. Remember that most mortgage contracts will permit you to pay extra on your principal at any time. Any time you get some unexpected money, you can use this rule to pay an additional one-time payment toward your mortgage principal.
If, for example, you were to receive an unexpected windfall three years into your mortgage, you could pay this money toward your loan principal, which would result in huge savings and a shorter payback period. For most loans, even a small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
Pacific Loan Brokers can walk you the mortgage process. Give us a call: 877-310-6200.
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