Making consistent additional payments toward the loan principal yields big savings. Borrowers pay extra in a few different ways. For many people,Perhaps the easiest way to keep track is to make one extra payment every year. Of course, many folks can't afford this huge extra payment, so splitting an additional payment into twelve additional monthly payments works too. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment each year. These options differ a little in reducing the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
It may not be possible for you to pay extra every month or even every year. But you should remember that most mortgages will allow additional principal payments at any time. Any time you come into unexpected money, you can use this provision to pay an additional one-time payment toward mortgage principal. If, for example, you receive a very large gift or tax refund four years into your mortgage, paying several thousand dollars into your mortgage principal can significantly reduce the repayment period of your loan and save enormously on interest over the duration of the loan. Unless the loan is quite large, even small amounts applied early can yield huge benefits over the life of the loan.
Evolution Mortgage Inc. can walk you Evolution Mortgage Inc. can answer questions about these interest savings and many others. Give us a call at 631-273-1188.
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