Extra Payments Yield Big Mortgage Savings

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Paying regular additional payments toward your principal yields huge savings. Borrowers can accomplish this in several ways. For many people,Perhaps the easiest way to organize this process is by making 1 additional payment every year. However, many folks won't be able to pull off this huge additional expense, so dividing one additional payment into twelve extra monthly payments works as well. Another popular option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in lowering the final payback amount and shortening payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.

Lump Sum Extra Payment

It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgage contracts will allow you to pay extra on your principal at any time. You can benefit from this rule to pay extra on your principal any time you come into extra money. If, for example, you were to receive an unexpected windfall four years into your mortgage, you could apply this windfall toward your mortgage loan principal, resulting in enormous savings and a shortened payback period. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.

Florida State Mortgage Group, Inc. can walk you Florida State Mortgage Group, Inc. can answer questions about these interest savings and many others. Give us a call at 954-359-3000.