Additional Payments Provide Big Savings
Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments which are applied to the principal. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to organize this process is by making 1 extra payment a year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment in a year. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Whenever you get some unexpected cash, consider using this provision to pay an additional one-time payment on your mortgage principal.
If, for example, you were to receive an unexpected windfall three years into your mortgage, you could pay this windfall toward your loan principal, which would result in enormous savings and a shortened payback period. Unless the loan is very large, even small amounts applied early 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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