Save on your Mortgage Loan
Making consistent extra payments toward the loan principal yields enormous returns. People use different methods to accomplish this goal. Paying 1 extra payment one time every year may be the simplest to track. But some folks will not be able to swing such a large extra expense, so dividing one extra payment into twelve additional monthly payments is a great option too. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one extra monthly payment each year. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
Some folks can't manage extra payments. Keep in mind that virtually all mortgages will allow you to pay extra on your principal at any point during repayment. Whenever you come into extra money, consider using this rule to pay an additional one-time payment toward principal.
For example: several years after moving into your home, you receive a very large tax refund,a very large inheritance, or a cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, resulting in enormous savings and a shorter payback period. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and duration of the loan.
Howard Financial can walk you At Howard Financial, we answer questions about interest-saving strategies every day. Call us at (610) 889-7467.