Extra Payments Provide Huge Mortgage Savings

Paying regular additional payments on the principal can yield huge savings. Borrowers can do this in several ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra payment a year. However, some people can't afford such a large extra payment, so splitting a single extra payment into 12 additional monthly payments is a fine option too. Finally, you can commit to paying a half payment every other week. Each of these options produces different results, but each will significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay more every month or even every year. Keep in mind that virtually all mortgages will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal any time you get some extra money.

If, for example, you were to receive a surprise windfall five years into your mortgage, paying several thousand dollars into your home's principal will significantly reduce the duration of your loan and save a huge amount on interest over the duration of the loan. For most loans, even a small amount, paid early enough in the mortgage, could offer huge savings in interest and in the duration of the loan.

Atlantic Financial Services can walk you Atlantic Financial Services can answer questions about these interest savings and many others. Call us: (732) 969-9300.

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