Additional Payments Yield Huge Mortgage Savings

Here's a simple trick to significantly reduce the length of your mortgage and save you thousands in interest: Make extra payments that are applied to the loan principal. People pay extra in a few different ways. For many people,Perhaps the easiest way to keep track is to make one additional mortgage payment every year. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.

Lump Sum Extra Payment

Some borrowers just can't make extra payments. Remember that virtually all mortgages will permit you to make additional payments to your principal at any time. Whenever you get some extra cash, you can use this rule to make an additional one-time payment on your principal. If, for example, you were to receive a surprise windfall three years into your mortgage, paying several thousand dollars into your mortgage principal will significantly reduce the repayment duration of your loan and save enormously on interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even small amounts applied early can yield huge savings over the life of the loan.

AAA Mortgage LLC can walk you At AAA Mortgage LLC, we answer questions about money-saving strategies almost every day. Give us a call: 816-272-5550.

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