Save Big on Your Mortgage
Paying consistent extra payments toward the principal can yield big savings. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making one extra mortgage payment per year. But many folks will not be able to afford this huge extra expense, so dividing a single extra payment into 12 additional monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The effect here is that you will make one extra monthly payment every year. These options differ slightly in lowering the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgages allow you to make additional payments at any time. Any time you come into unexpected money, consider using this rule to make an additional one-time payment on principal.
If, for example, you receive a surprise windfall five years into your mortgage, paying several thousand dollars into your home's principal can significantly reduce the period of your loan and save enormously on mortgage interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
Ashok Lakshmanan can walk you through the pitfalls of getting a mortgage. Call us at 630-717-3600.