Extra Payments Yield Big Mortgage Savings

Paying regular extra payments toward your principal balance will yield huge returns. Borrowers pay more on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is to make one extra mortgage payment a year. Of course, many people won't be able to afford such an enormous extra expense, so splitting a single additional payment into twelve additional monthly payments is a great option too. Another very popular option is to pay a half payment every other week. The result is you will make one additional monthly payment in a year. Each of these options yields different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay more every month or even every year. But it's important to note that most mortgages allow you to make additional principal payments at any time. Any time you come into unexpected cash, consider using this rule to make a one-time additional payment toward principal. Here's an example: several years after moving into your home, you get a very large tax refund,a very large inheritance, or a cash gift; , paying several thousand dollars into your mortgage principal will shorten the period of your loan and save a huge amount on interest over the life of the loan. 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.

Wisdom Financial, Inc. can walk you the mortgage process. Give us a call at 708.499.6088.