Save Big on Your Mortgage
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Paying consistent extra payments toward the loan principal yields big returns. You can pay more on principal by employing various techniques. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment every year. But some folks will not be able to swing such an enormous extra expense, so dividing an extra payment into 12 extra monthly payments works as well. Finally, you can commit to paying a half payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Lump Sum Extra Payment
Some people can't manage extra payments. But it's important to note that most mortgages allow additional principal payments at any time. Whenever you get some extra cash, consider using this rule to make a one-time additional payment toward your mortgage principal.
If, for example, you receive a very large gift or tax refund four years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, resulting in significant savings and a shorter payback period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
The Ross Fund can answer questions about these interest savings and many others. Give us a call at (949) 533-5311.
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