Save on Your Mortgage
Making regular extra payments on the principal balance yields singificant returns. People employ various techniques to accomplish this goal. Paying a single additional full payment one time a year is perhaps the simplest to track. However, some people can't swing such an enormous additional payment, so splitting one additional payment into 12 additional monthly payments works too. Another popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment each year. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
One-time Additional Payment
It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts will allow you to make additional principal payments at any time. Any time you come into extra cash, consider using this rule to make an additional one-time payment on your principal.
If, for example, you were to receive a surprise windfall four years into your mortgage, investing a few thousand dollars into your mortgage principal will shorten the duration of your loan and save a huge amount on interest over the duration of the loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
Ward Kilduff Mortgage can walk you At Ward Kilduff Mortgage, we answer questions about interest-saving strategies almost every day. Call us: (860) 658-7100.
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