Extra Payments Provide Huge Mortgage Savings

Making consistent additional payments on your principal balance will yield huge savings. Borrowers can pay more on principal by employing various techniques. For many people,Perhaps the easiest way to organize this process is to make 1 additional payment a year. If you can't afford to pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Another popular option is to pay half of your payment every other week. The effect here is that you will make one additional monthly payment in a year. Each option yields different results, but each will significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.

Lump Sum Extra Payment

Some folks just can't make any extra payments. But remember that most mortgage contracts will allow additional principal payments at any time. You can benefit from this rule to pay extra on your mortgage principal when you get some extra money.

For example: a few years after buying your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your home's principal will reduce the repayment period of your loan and save enormously on mortgage interest over the life of the loan. For most loans, even this relatively small amount, paid early in the mortgage, could offer big savings in interest and length of the loan.

Diversified Capital Funding can walk you Diversified Capital Funding has your mortgage answers. Give us a call at (925) 226-7130 or (209) 833-3338.