Extra Payments Provide Big Mortgage Savings
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Paying regular extra payments on the loan principal can yield huge returns. Borrowers can accomplish this in various ways. For many people,Perhaps the easiest way to keep track is to make one extra payment every year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each of these options 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 Extra Payment
It may not be possible for you to pay extra every month or even every year. Keep in mind that virtually all mortgages will allow you to make additional payments to your principal at any time. Whenever you come into extra money, consider using this provision to make an additional one-time payment toward your principal.
For example: several years after moving into your home, you receive a huge tax refund,a large inheritance, or a cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a modest amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
Founders Mortgage Inc can answer questions about these interest savings and many others. Give us a call at 405-418-8545.