Extra Payments Yield Huge Mortgage Savings

Paying regular extra payments toward your loan principal will provide singificant savings. You can accomplish this in several ways. For many people,Perhaps the simplest way to keep track is by making 1 additional payment a year. If you can't afford to 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 half of your payment every other week. The result is you make one extra monthly payment in a year. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay more every month or even every year. But remember that most mortgage contracts will allow additional payments at any time. Whenever you get some extra cash, you can use this rule to make an additional one-time payment toward your mortgage principal.

Here's an example: a few years after buying your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your home's principal can significantly reduce the repayment duration of your loan and save a huge amount on interest paid over the life of the loan. For most loans, even this small amount, paid early in the mortgage, could offer big savings in interest and length of the loan.

The Mortgage Firm - Team Meyers can walk you through the pitfalls of getting a mortgage. Call us: (407) 889-4321.

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