Save on Your Mortgage
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Making consistent extra payments toward your principal can yield huge returns. People make this happen in a few ways. Making 1 additional full payment once a year is probably the simplest to keep track of. However, some folks won't be able to pull off such an enormous additional payment, so splitting a single extra payment into twelve additional monthly payments is a great option too. Another popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment each year. Each option produces different results, 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 can't manage extra payments. Keep in mind that virtually all mortgage contracts will permit you to pay extra on your principal at any time. Any time you get some unexpected cash, you can use this rule to pay a one-time additional payment toward mortgage principal.
For example: several years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , you could apply this windfall toward your mortgage loan principal, resulting in huge savings and a shortened payback period. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
At Mortgage Max Inc, we answer questions about interest-saving strategies every day. Call us at (760) 547-2080.