Licensed in: CA

Extra Payments Provide Huge Mortgage Savings

Paying consistent extra payments on the principal balance will provide significant returns. Borrowers use different methods to accomplish this goal. Paying 1 additional full payment once every year is perhaps the simplest to track. If you can't pay an extra whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment every year. Each of these options yields different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.

Lump-sum Additional Payment

Some folks can't manage extra payments. But it's important to note that most mortgages will allow additional payments at any time. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, you could apply this money toward your mortgage loan principal, resulting in huge savings and a shorter loan period. For most loans, even a relatively modest amount, paid early enough in the loan period, could offer big savings in interest and in the length of the loan.

Award Mortgage Group, a Division of American Pacific Mortgage Corporation NMLS 1850 Licensed in: CA

4581 Orchard Ave
San Diego, CA 92107