Extra Payments Yield Huge Savings
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Paying regular extra payments toward the principal balance yields big savings. Borrowers accomplish this goal in several different ways. For many people,Perhaps the simplest way to organize this process is to make one extra payment every year. If you can't pay an additional whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Another option is to pay half of your payment every other week. The result is you will make one extra monthly payment in a year. These options differ a little in reducing the final payback amount and shortening payback length, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Additional One-time payment
It may not be possible for you to pay down your principal every month or even every year. But it's important to note that most mortgages will allow additional payments at any time. Whenever you get some unexpected money, you can use this provision to make an additional one-time payment toward principal.
Here's an example: several years after buying your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your loan principal, which would result in huge savings and a shorter loan period. Unless the loan is quite large, even modest amounts applied early can yield huge savings over the duration of the loan.
Blue Sky Funding, LLC can answer questions about these interest savings and many others. Call us at 817-616-3651.