Extra Payments Yield Huge Savings

Making consistent extra payments on the loan principal can yield big returns. People employ various techniques to accomplish this goal. Paying a single extra full payment one time a year may be the easiest to track. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can commit to paying a half payment every other week. Each option produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.

Additional One-time payment

Some borrowers can't manage extra payments. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your principal any time you come into extra money.

For example: a few years after moving into your home, you get a very large tax refund,a very large inheritance, or a non-taxable cash gift; , investing several thousand dollars into your home's principal can significantly shorten the repayment duration of your loan and save a huge amount on interest over the life of the mortgage loan. For most loans, even this relatively small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.

Chris Caggiano - Grand Oaks Funding, LLC can walk you through the pitfalls of getting a mortgage. Call us at (718) 477-4405.

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