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Paying regular additional payments toward the loan principal will yield significant savings. People use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is by making 1 extra payment per year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment every year. Each of these options yields different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Lump Sum Extra Payment
Some folks just can't make any extra payments. But it's important to note that most mortgage contracts will allow you to make additional payments at any time. Whenever you come into extra cash, consider using this provision to make a one-time additional payment toward principal.
For example: several years after buying your home, you receive a very large tax refund,a very large legacy, or a cash gift; , investing several thousand dollars into your mortgage principal can reduce the period of your loan and save a huge amount on mortgage interest over the duration of the loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
At Fortune Financial Corporation, we answer questions about money-saving strategies almost every day. Give us a call at 731-925-9959.