Huge Interest Savings: Available to Anyone
Making regular extra payments toward your loan principal will provide enormous returns. You can do this in several ways. Making one extra full payment one time a year may be the easiest to track. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment every year. Each option produces different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
One-time Additional Payment
Some people can't manage any extra payments. But remember that most mortgage contracts will allow additional principal payments at any time. Any time you come into extra cash, consider using this rule to pay a one-time additional payment toward principal.
If, for example, you receive a very large gift or tax refund five years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in enormous savings and a shorter payback period. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and duration of the loan.
Affinity Mortgage Brokers can walk you Affinity Mortgage Brokers can answer questions about these interest savings and many others. Give us a call at 719-425-2226.