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Paying consistent extra payments on your loan principal will yield enormous returns. You can pay extra on principal by employing various techniques. Paying one extra payment once a year may be the simplest to track. But many folks won't be able to pull off such a large additional payment, so dividing a single additional payment into twelve extra monthly payments is a great option too. Another option is to pay a half payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly shorten the duration of your mortgage and lower the total interest paid over the duration of the loan.
Additional One-time payment
Some borrowers can't manage any extra payments. But it's important to note that most mortgages allow additional payments at any time. You can take advantage of this rule to pay extra on your mortgage principal when you get some extra money. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a non-taxable cash gift; , you could apply this money toward your loan principal, resulting in significant savings and a shorter loan 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.
Funding Resources Mortgage Corp can answer questions about these interest savings and many others. Call us at 888-376-3762.