Big Interest Savings: Available to Anyone with a Mortgage
Making regular extra payments on the loan principal provides enormous savings. Borrowers can pay extra on principal in many different ways. Paying a single additional payment once every year is probably the easiest to track. If you can't afford to pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each option yields different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages will allow you to make additional principal payments at any time. Whenever you come into unexpected money, consider using this rule to pay a one-time additional payment toward principal.
Here's an example: five years after moving into your home, you get a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal will reduce the duration of your loan and save a huge amount on interest paid over the duration of the loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge benefits over the life of the loan.
Alternative Mortgage Group can walk you Alternative Mortgage Group has your mortgage answers. Give us a call: 561-395-4264.