Extra Payments Yield Huge Savings
Here's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments that go toward the loan principal. People pay extra in a few different ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment per year. If you can't afford to 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. Finally, you can pay half of your mortgage payment every two weeks. Each option produces slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
Some people can't manage any extra payments. Keep in mind that almost all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you come into extra money.
Here's an example: five years after moving into your home, you receive a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal can reduce the duration of your loan and save enormously on mortgage interest paid over the life of the loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.
Carter Financial Solutions can walk you Carter Financial Solutions has your mortgage answers. Give us a call at 866-840-8745 x2.
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