Additional Payments Yield Huge Savings

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Paying regular extra payments toward your principal provides significant returns. People use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is by making 1 additional mortgage payment a year. If you can't afford to pay an extra whole payment in one month, 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 two weeks. These options differ a little in reducing the total interest paid and reducing payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Additional One-time payment

It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgage contracts will allow you to pay extra on your principal at any time. Any time you get some extra money, consider using this rule to make an additional one-time payment on principal.

If, for example, you receive a very large gift or tax refund five years into your mortgage, you could apply this money toward your loan principal, resulting in enormous savings and a shortened payback period. Unless the loan is very large, even small amounts applied early in the loan period can yield huge benefits over the duration of the loan.

Creative Financial can get you past the pitfalls of getting a mortgage. Give us a call: (808) 891-9292.

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