Save on your Mortgage
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Paying consistent additional payments toward your loan principal will provide significant savings. People use different methods to meet this goal. Making 1 extra payment one time a year may be the simplest to track. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields slightly different results, but they will all significantly reduce 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 more every month or even every year. Remember that almost all mortgage contracts will permit you to pay extra on your principal at any point during repayment. Whenever you get some unexpected money, you can use this provision to pay a one-time additional payment toward principal.
If, for example, you receive a surprise windfall five years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even a modest amount, paid early enough in the mortgage, could offer big savings in interest and in the duration of the loan.
At ICM Lending, we answer questions about money-saving strategies almost every day. Give us a call at 714-713-9193.
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