Save Big on your Mortgage
Paying regular extra payments toward the loan principal will yield enormous returns. Borrowers can do this in various ways. Making 1 additional payment once every year is probably the simplest to track. Of course, many folks won't be able to pull off this huge extra payment, so splitting a single additional payment into 12 additional monthly payments is a great option too. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment every year. These options differ a little 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 life of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgage contracts allow you to make additional principal payments at any time. Any time you come into unexpected money, consider using this provision to pay a one-time additional payment toward principal. For example: five years after moving into your home, you get a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , you could pay a portion of this windfall toward your loan principal, which would result in significant savings and a shorter payback period. Unless the loan is very large, even small amounts applied early can yield huge savings over the duration of the loan.
Saab Mortgage can walk you Saab Mortgage can answer questions about these interest savings and many others. Call us at 703-288-0777.
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