Save on your Mortgage

Making consistent extra payments on the principal balance can yield enormous returns. You can pay against principal in many different ways. For many people,Perhaps the simplest way to keep track is to make one additional mortgage payment every year. Of course, many folks can't afford such a large additional expense, so splitting an additional payment into 12 additional monthly payments is a fine option too. Another popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment every year. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.

Lump-sum Additional 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 you to make additional payments at any time. You can benefit from this provision to pay extra on your principal any time you come into extra money. Here's an example: a few years after buying your home, you get a larger than expected tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your home's principal will shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.

Ashok Lakshmanan can walk you Ashok Lakshmanan has your mortgage answers. Give us a call at 6307173600.