Additional Payments Yield Big Savings
Paying consistent extra payments on the principal balance will yield enormous returns. People use different methods to accomplish this goal. Paying 1 additional payment once per year may be the easiest to arrange. However, many people can't pull off this huge additional payment, so dividing an additional payment into 12 extra monthly payments works as well. Another popular option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. Each of these options yields slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the duration of the loan.
One-time Additional Payment
Some borrowers can't manage any extra payments. Remember that almost all mortgages will permit you to pay extra on your principal at any point during repayment. Whenever you get some unexpected money, consider using this rule to pay a one-time additional payment on your principal.
For example: five years after moving into your home, you get a huge tax refund,a very large legacy, or a cash gift; , paying a few thousand dollars into your mortgage principal will shorten the repayment duration of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even a small amount, paid early enough in the mortgage, could offer big savings in interest and length of the loan.
Cal Coast Financial Corp can walk you Cal Coast Financial Corp has your mortgage answers. Call us: (510) 683-9850.
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