Save Big on Your Mortgage
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Paying regular extra payments toward the principal balance will yield huge savings. People employ various techniques to meet this goal. Paying one additional payment once every year is probably the easiest to arrange. However, many folks won't be able to swing this huge additional expense, so splitting a single additional payment into twelve extra monthly payments is a fine option too. Another popular option is to pay half of your payment every two weeks. The result is you will make one extra monthly payment in a 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.
Additional One-time payment
Some folks can't manage extra payments. Remember that most mortgage contracts will permit you to pay extra on your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money.
If, for example, you were to receive an unexpected windfall four years into your mortgage, you could pay this money toward your mortgage loan principal, resulting in huge savings and a shortened loan period. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
At Cal Fed Mortgage, we answer questions about money-saving strategies every day. Call us at (310) 378-2858.