Extra Payments Provide Big Savings

Here's a simple trick to reduce the repayment period of your mortgage and save thousands in interest: Make extra payments which go toward your loan principal. You can pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make one extra payment a year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment every year. Each option yields slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Additional One-time payment

Some people can't manage extra payments. But you should remember that most mortgages will allow additional principal payments at any time. Whenever you get some unexpected money, you can use this provision to pay an additional one-time payment toward your mortgage principal.

If, for example, you were to receive an unexpected windfall four years into your mortgage, you could pay this money toward your mortgage loan principal, which would result in enormous savings and a shortened payback period. For most loans, even this relatively small amount, paid early in the mortgage, could offer huge savings in interest and duration of the loan.

Statewide Funding can walk you Statewide Funding has your mortgage answers. Give us a call at (415) 456-7802.

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