Extra Payments Yield Big Mortgage Savings
Paying consistent additional payments on the principal will provide big returns. People employ various techniques to meet this goal. Making one additional payment once per year is likely the simplest to arrange. But some people will not be able to swing this huge additional expense, so splitting a single additional payment into twelve additional monthly payments is a great option too. Another option is to pay a half payment every two weeks. The result is you will make one extra monthly payment each year. These options differ a little in reducing the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
Some borrowers can't manage extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. You can benefit from this provision to pay extra on your principal when you get some extra money.
For example: a few years after moving into your home, you get a huge tax refund,a large legacy, or a cash gift; , you could apply this money toward your loan principal, resulting in huge savings and a shorter loan period. Unless the mortgage loan is very large, even small amounts applied early in the loan period can produce huge benefits over the duration of the loan.
Prime Capital Mortgage Corp can walk you the mortgage process. Give us a call at 248-644-1200.
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