Additional Payments Yield Huge Savings
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Making regular extra payments on the principal balance provides enormous returns. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra payment per year. If you can't pay an extra whole payment in one month, 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 will make one additional monthly payment in a year. Each option produces different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Additional One-time payment
Some borrowers just can't make any extra payments. Keep in mind that almost all mortgages will permit you to make additional payments to your principal at any time. Whenever you get some unexpected money, you can use this rule to make a one-time additional payment toward your mortgage principal.
If, for example, you receive a surprise windfall four years into your mortgage, you could apply this windfall toward your loan principal, which would result in significant savings and a shorter payback period. For most loans, even a small amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
I can answer questions about these interest savings and many others. Give me a call at (619) 758-4035.