Huge Interest Savings: Available to Anyone
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Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make additional payments which are applied toward the loan principal. Borrowers can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra payment a year. If you can't afford to pay an extra 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 half of your payment every two weeks. The effect here is that you make one extra monthly payment every year. Each option produces slightly different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Lump-sum Additional Payment
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can take advantage of this provision to pay extra on your mortgage principal when you get some extra money.
For example: five years after buying your home, you receive a very large tax refund,a large inheritance, or a non-taxable cash gift; , you could pay this money toward your loan principal, which would result in huge savings and a shorter payback period. Unless the loan is quite large, even modest amounts applied early can produce huge savings over the duration of the loan.
Sierra View Financial Corp has your mortgage answers. Give us a call at 916-989-6222.