Simple Ways to Save Big on Your Mortgage
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Making consistent extra payments on the loan principal can yield significant returns. You can do this in several ways. For many people,Perhaps the simplest way to organize this process is by making one additional mortgage payment a year. If you can't afford to pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ a little in reducing the total interest paid and reducing payback length, but each will 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 you should remember that most mortgages allow you to make additional principal payments at any time. Whenever you get some extra money, you can use this rule to make a one-time additional payment toward mortgage principal.
For example: five years after moving into your home, you receive a huge tax refund,a large inheritance, or a non-taxable cash gift; , you could apply a portion of this windfall toward your mortgage loan principal, which would result in significant savings and a shortened payback period. For most loans, even this small amount, paid early enough in the loan period, could offer huge savings in interest and in the length of the loan.
Peoples Discount Mortgage can answer questions about these interest savings and many others. Call us: 909-660-8333.
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