Additional Payments Provide Big Mortgage Savings

Making regular additional payments toward the principal will provide singificant savings. Borrowers can accomplish this in several ways. Making a single extra full payment one time per year is probably the easiest to arrange. 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 write a check for that additional amount monthly. Another popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment every year. Each of these options yields different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.

One-time 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 additional principal payments at any time. You can benefit from this rule to pay extra on your principal when you get some extra money. If, for example, you receive a surprise windfall three years into your mortgage, paying a few thousand dollars into your mortgage principal will shorten the repayment duration of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even a few thousand dollars 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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