Extra Payments Provide Big Savings
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Making regular extra payments on your principal can yield enormous returns. People pay extra in several different ways. For many people,Perhaps the simplest way to keep track is by making one extra mortgage payment per year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment every year. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
One-time Additional Payment
Some borrowers just can't make extra payments. But it's important to note that most mortgages allow additional payments at any time. You can take advantage of this provision to pay extra on your principal when you get some extra money.
Here's an example: several years after buying your home, you receive a very large tax refund,a large inheritance, or a cash gift; , you could pay this money toward your loan principal, resulting in huge savings and a shortened payback period. Unless the mortgage loan is very large, even modest amounts applied early can produce huge benefits over the life of the loan.
Mortgage Direct Inc. can walk you through the mortgage process. Call us: 1-844-MBROKER (1-844-627-6537).