Extra Payments Provide Big Savings
Making consistent extra payments toward your loan principal yields enormous savings. People employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to keep track is by making one additional payment a year. However, some people can't pull off such an enormous additional expense, so splitting a single additional payment into twelve additional monthly payments is a great option too. Finally, you can pay a half payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but they will all 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
Some folks just can't make extra payments. Remember that virtually all mortgages will permit you to pay extra on your principal at any time. Any time you come into extra cash, you can use this rule to make a one-time additional payment toward principal. If, for example, you were to receive a large gift or tax refund four years into your mortgage, investing several thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even this relatively small amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
MidTowne Mortgage can walk you MidTowne Mortgage can answer questions about these interest savings and many others. Call us: (478) 746-2063.