Extra Payments Yield Big Savings

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Paying regular extra payments on the loan principal will provide huge savings. People use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is by making 1 additional mortgage payment every year. If you can't pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another popular option is to pay half of your payment every two weeks. The effect here is that you will make one additional monthly payment every year. These options differ slightly in lowering the total interest paid and shortening payback length, but they will all significantly reduce the duration 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 it's important to note that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay down your principal when you come into extra money. For example: a few years after moving into your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , investing several thousand dollars into your mortgage principal will shorten the repayment duration of your loan and save a huge amount on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the duration of the loan.

Southern Trust Mortgage can walk you At Southern Trust Mortgage, we answer questions about money-saving strategies almost every day. Call us at (301)-938-1655.