Huge Savings on Interest: Available to Anyone
Paying regular extra payments on your principal yields enormous savings. Borrowers make this happen in several different ways. Paying 1 additional payment one time a year is likely the easiest to keep track of. But many folks won't be able to afford such an enormous additional expense, so dividing an additional payment into 12 extra monthly payments works as well. Another very popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment in a year. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Additional One-time payment
It may not be possible for you to pay more every month or even every year. Remember that most mortgage contracts will allow you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay down your principal when you come into extra money.
If, for example, you receive a large gift or tax refund just a few years into your mortgage, you could apply this money toward your loan principal, resulting in significant savings and a shortened payback period. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the duration of the loan.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about these interest savings and many others. Give us a call at (808) 935-0678.
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