Extra Payments Provide Big Mortgage Savings
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Making regular extra payments on the principal provides big savings. People employ various techniques to accomplish this goal. Making 1 additional full payment once every year may be the simplest to arrange. However, many folks won't be able to afford this huge additional expense, so splitting an extra payment into 12 additional monthly payments is a fine option too. Another option is to pay a half payment every other week. The effect here is that you make one extra monthly payment every year. Each of these options produces slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra Payment
Some people just can't make any extra payments. Remember that almost all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some extra money, you can use this provision to pay an additional one-time payment on your principal.
If, for example, you receive an unexpected windfall four years into your mortgage, paying a few thousand dollars into your mortgage principal will reduce the period of your loan and save a huge amount on interest paid over the life of the loan. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
At Bliss Mortgage LLC, we answer questions about interest-saving strategies almost every day. Call us: 813-966-1888.
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