Extra Payments Provide Big Savings

Making consistent extra payments toward your principal balance provides huge returns. People use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is to make one extra payment per year. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each option produces different results, but they will all significantly shorten 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 extra every month or even every year. But it's important to note that most mortgages allow additional payments at any time. Whenever you come into extra cash, you can use this rule to pay a one-time additional payment toward principal. Here's an example: a few years after buying your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal will significantly reduce the repayment period of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can yield huge savings over the life of the loan.

Boardwalk Mortgage can walk you through the pitfalls of getting a mortgage. Call us: 1-800-606-2794.