Big Savings on Interest: Available to Anyone with a Mortgage
Paying consistent extra payments toward the loan principal will yield singificant returns. Borrowers can accomplish this in several ways. Paying 1 additional payment once per year is perhaps the easiest to track. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment each year. Each of these options yields different results, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you get some extra cash, consider using this provision to pay an additional one-time payment toward principal. If, for example, you receive a large gift or tax refund five years into your mortgage, you could apply this windfall toward your loan principal, which would result in huge savings and a shortened loan period. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and in the length of the loan.
PREMIERE MORTGAGE SERVICES INC. can walk you At PREMIERE MORTGAGE SERVICES INC., we answer questions about money-saving strategies every day. Give us a call at 978-422-2311.