Big Interest Savings: Available to Anyone

Paying regular extra payments toward the principal provides enormous returns. People use different methods to accomplish this goal. Paying 1 additional payment once every year may be the simplest to arrange. 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 write a check for that additional amount monthly. Finally, you can pay a half payment every two weeks. Each of these options yields slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay 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 mortgage contracts will allow you to make additional payments to your principal at any point during repayment. Whenever you come into extra money, consider using this rule to make an additional one-time payment toward principal.

If, for example, you were to receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly shorten the repayment duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.

Ashok Lakshmanan can walk you through the pitfalls of getting a mortgage. Give us a call at 6307173600.