Save on your Mortgage Loan
Paying regular extra payments on your loan principal provides huge savings. Borrowers can do this in several ways. Paying a single additional payment once a year is perhaps the simplest to keep track of. However, many folks can't afford such a large additional expense, so dividing an extra payment into 12 additional monthly payments works as well. Another very popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment in a year. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Lump-sum Additional Payment
Some folks can't manage any extra payments. Remember that almost all mortgages will permit you to make additional payments to your principal at any time. Any time you come into unexpected cash, consider using this provision to make a one-time additional payment on principal. If, for example, you receive a large gift or tax refund five years into your mortgage, you could pay this money toward your loan principal, resulting in huge savings and a shorter payback period. For most loans, even a modest amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Pacific Loan Brokers can walk you through the pitfalls of getting a mortgage. Call us: 877-310-6200.
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