Extra Payments Yield Huge Savings
Making consistent extra payments toward your principal balance provides singificant returns. People employ various techniques to meet this goal. For many people,Perhaps the easiest way to keep track is by making one additional mortgage payment per year. Of course, some people can't afford this huge extra expense, so splitting an additional payment into 12 additional monthly payments works as well. Another very popular option is to pay half of your payment every other week. The result is you will make one additional monthly payment every year. These options differ a little in lowering the final payback amount and shortening payback length, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. But remember that most mortgages will allow additional principal payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you get some extra money. If, for example, you receive an unexpected windfall just a few years into your mortgage, investing a few thousand dollars into your mortgage principal will significantly shorten the duration of your loan and save a huge amount on mortgage interest paid over the life of the loan. For most loans, even this relatively modest amount, paid early enough in the loan period, could offer huge savings in interest and in the duration of the loan.
Longhorn Mortgage can walk you Longhorn Mortgage can answer questions about these interest savings and many others. Call us at 512-302-9410.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.