Extra Payments Provide Big Mortgage Savings

Paying regular extra payments on your loan principal will yield big savings. Borrowers pay extra on principal in various ways. Making one additional payment one time a year is probably the easiest to track. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The effect here is that you make one additional monthly payment in a year. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

Some folks just can't make extra payments. But you should remember that most mortgage contracts will allow additional principal payments at any time. You can benefit from this rule to pay down your mortgage principal when you get some extra money. Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a large inheritance, or a cash gift; , paying a few thousand dollars into your mortgage principal can 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 modest amounts applied early in the loan period can produce huge benefits over the life of the loan.

First Southeast Mortgage Corporation can walk you First Southeast Mortgage Corporation has your mortgage answers. Call us: 954.920.9799.

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