Save on your Mortgage
Paying consistent extra payments on the loan principal will provide big returns. You can do this in various ways. Paying a single additional full payment once every year is likely the easiest to track. But many folks can't afford this huge additional payment, so splitting one extra payment into 12 extra monthly payments is a fine option too. Another option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment every year. Each option produces slightly different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Lump Sum Extra Payment
Some folks can't manage any extra payments. But you should remember that most mortgage contracts will allow you to make additional principal payments at any time. You can take advantage of this provision to pay down your mortgage principal when you come into extra money.
If, for example, you receive a very large gift or tax refund just a few years into your mortgage, you could apply a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shorter payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the duration of the loan.
Carter Financial Solutions can walk you At Carter Financial Solutions, we answer questions about money-saving strategies every day. Give us a call at 866-840-8745 x2.
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