Additional Payments Yield Big Savings
Paying consistent additional payments toward your principal balance provides big returns. You pay extra on principal in many different ways. Making one additional full payment once a year is perhaps the easiest to keep track of. If you can't afford to 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 a half payment every two weeks. The effect here is that you will make one extra monthly payment every year. Each option produces different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Additional One-time payment
Some folks can't manage extra payments. Remember that most mortgages will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra money, consider using this rule to pay an additional one-time payment toward mortgage principal.
Here's an example: several years after buying your home, you receive a huge tax refund,a large legacy, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in huge savings and a shortened payback period. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.
Ward Kilduff Mortgage can walk you Ward Kilduff Mortgage has your mortgage answers. Call us: (860) 658-7100.
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