Extra Payments Yield Huge Savings

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Paying consistent additional payments on the loan principal will yield enormous savings. You can accomplish this using a few different techniques. Paying a single extra payment one time a year may be the simplest to arrange. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. These options differ a little in reducing the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.

One-time Additional Payment

It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgages will permit you to pay extra on your principal at any time. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. If, for example, you were to receive a very large gift or tax refund three years into your mortgage, investing a few thousand dollars into your mortgage principal can shorten the duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. Unless the mortgage loan is very large, even small amounts applied early can produce huge savings over the life of the loan.

CFC Mortgage Bankers can walk you CFC Mortgage Bankers can answer questions about these interest savings and many others. Call us: (805) 432-4898.