Huge Savings on Interest: Available to Anyone with a Mortgage
Making consistent extra payments toward the loan principal can yield huge returns. Borrowers make this happen in a few ways. For many people,Perhaps the easiest way to keep track is to make one additional payment per year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every other week. The result is you make one additional monthly payment every year. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any point during repayment. You can benefit from this provision to pay down your mortgage principal when you get some extra money. If, for example, you were to receive a very large gift or tax refund five years into your mortgage, paying a few thousand dollars into your home's principal will shorten the period of your loan and save enormously on interest paid over the duration of the mortgage loan. For most loans, even a small amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
Pacific Loan Brokers can walk you At Pacific Loan Brokers, we answer questions about money-saving strategies almost every day. Give us a call at 877-310-6200.
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