Save Big on Your Mortgage
There's a trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make extra payments that go to the loan principal. People accomplish this goal in a few ways. For many people,Perhaps the simplest way to keep track is by making 1 extra mortgage payment per year. However, some folks will not be able to afford such an enormous extra payment, so splitting a single extra payment into twelve extra monthly payments is a great option too. Finally, you can commit to paying a half payment every two weeks. These options differ a little in reducing the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Lump Sum Extra 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 mortgage contracts will allow you to make additional principal payments at any time. Any time you get some unexpected money, you can use this rule to pay an additional one-time payment on mortgage principal.
If, for example, you receive a very large gift or tax refund four years into your mortgage, you could apply a portion of this money toward your mortgage loan principal, which would result in huge savings and a shortened payback period. For most loans, even a relatively small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
First Community Bank of Central Al. can walk you First Community Bank of Central Al. can answer questions about these interest savings and many others. Give us a call: (334) 285-8850.