Simple Ways to Save on Your Mortgage
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Making consistent extra payments on your principal yields enormous savings. People make this happen in a few ways. Making 1 additional payment one time a year is probably the easiest to track. However, many people will not be able to swing this huge extra expense, so dividing an additional payment into 12 extra monthly payments works as well. Another very popular option is to pay a half payment every two weeks. The effect here is that you make one extra monthly payment each year. Each option yields different results, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
Additional One-time 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 payments at any time. You can benefit from this rule to pay down your mortgage principal when you get some extra money.
If, for example, you receive a surprise windfall four years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter payback period. For most loans, even this relatively small amount, paid early in the loan period, could offer huge savings in interest and in the length of the loan.
At Riviera Funding, we answer questions about money-saving strategies almost every day. Call us at (310) 373-7406.