Mortgage Savings Tips
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Paying consistent extra payments toward your principal balance can yield enormous returns. Borrowers can do this in several ways. For many people,Perhaps the easiest way to keep track is by making one additional payment per year. However, many folks won't be able to swing such a large extra payment, so dividing a single additional payment into 12 extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal any time you come into extra money. If, for example, you receive a surprise windfall three years into your mortgage, you could apply this money toward your loan principal, resulting in significant savings and a shortened loan period. For most loans, even a relatively modest amount, paid early enough in the mortgage, could offer huge savings in interest and length of the loan.
At Pacificwide Lending, we answer questions about interest-saving strategies every day. Give us a call at 925-461-0500.