Big Savings on Interest: Available to Anyone with a Mortgage
Making regular extra payments toward the loan principal can yield big savings. You pay more on principal in various ways. For many people,Perhaps the easiest way to organize this process is by making one additional mortgage payment every year. Of course, many people can't swing such a large extra expense, so dividing a single extra payment into twelve additional monthly payments works too. Finally, you can commit to paying half of your mortgage payment every other week. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
Some borrowers just can't make any extra payments. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any time. Any time you get some extra cash, consider using this provision to make a one-time additional payment on principal.
For example: several years after buying your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal will shorten the repayment period of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can produce huge benefits over the duration of the loan.
Smith-Craine Real Estate Financing can walk you Smith-Craine Real Estate Financing can answer questions about these interest savings and many others. Call us: (415) 406-2330.