Extra Payments Yield Big Savings

Making regular additional payments toward the loan principal will yield huge returns. Borrowers employ various techniques to meet this goal. For many people,Perhaps the easiest way to keep track is by making 1 extra payment a year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. Each of these options produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.

Lump Sum Extra Payment

It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgage contracts allow additional principal payments at any time. Any time you come into extra cash, you can use this provision to pay a one-time additional payment toward principal. If, for example, you were to receive a surprise windfall just a few years into your mortgage, investing a few thousand dollars into your home's principal will shorten the duration of your loan and save enormously on mortgage interest paid over the duration of the mortgage loan. Unless the loan is very large, even a few thousand dollars applied early can produce huge savings over the duration of the loan.

Custom Lending Group can walk you Custom Lending Group has your mortgage answers. Give us a call: (707) 252-2700.

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