Making regular extra payments toward your principal balance can yield enormous returns. People use different methods to meet this goal. Making a single additional payment once per year is probably the simplest to keep track of. If you can't pay an extra whole payment in one month, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each option yields 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 borrowers can't manage extra payments. But remember that most mortgages will allow you to make additional payments at any time. You can benefit from this rule to pay down your principal any time you get some extra money. Here's an example: several years after moving into your home, you receive a huge tax refund,a large legacy, or a cash gift; , you could pay this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened loan period. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.
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