Huge Interest Savings: Available to Anyone with a Mortgage
Here's a simple trick to significantly reduce the length of your mortgage and save you thousands over the course of your loan: Make extra payments that go to the loan principal. People pay extra in a few different ways. Paying 1 additional payment one time per year is probably the easiest to keep track of. However, many folks won't be able to afford such an enormous additional expense, so splitting one additional payment into 12 extra monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Additional One-time payment
Some people can't manage any extra payments. Keep in mind that most mortgages will permit you to make additional payments to your principal at any point during repayment. Whenever you come into unexpected cash, you can use this rule to make a one-time additional payment on your mortgage principal. For example: several years after buying your home, you get a very large tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. Unless the mortgage loan is very large, even small amounts applied early in the loan period can produce huge benefits over the duration of the loan.
Ashok Lakshmanan can walk you through the pitfalls of getting a mortgage. Give us a call: 630-717-3600.