Save Big on your Mortgage
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Making regular extra payments on your principal balance can yield huge savings. You can pay against principal by employing various techniques. Making one additional full payment once per year is likely the easiest to arrange. But many folks can't pull off such an enormous extra payment, so dividing one additional payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying half of your mortgage payment every other week. Each option yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Lump-sum Additional Payment
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any time. Whenever you come into unexpected cash, consider using this rule to make a one-time additional payment on your principal.
Here's an example: five years after buying your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will shorten the duration of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. For most loans, even this relatively small amount, paid early enough in the loan period, could offer big savings in interest and length of the loan.
PFS Funding has your mortgage answers. Call us: (925) 560-7644.