Additional Payments Yield Huge Savings

Here's a simple trick to reduce the repayment period of your mortgage and save you thousands in interest: Make extra payments that are applied toward the loan principal. People pay extra in a few different ways. Making a single additional payment one time a year may be the simplest to keep track of. If you can't pay an extra whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each option produces slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

One-time Additional Payment

It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgages will allow you to pay extra on your principal at any point during repayment. You can take advantage of this provision to pay down your principal when you come into extra money. Here's an example: several years after moving into your home, you get a larger than expected tax refund,a very large inheritance, or a cash gift; , you could pay this money toward your loan principal, resulting in enormous savings and a shorter payback period. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.

American Commerce Mortgage can walk you American Commerce Mortgage can answer questions about these interest savings and many others. Give us a call: 714-970-9700.

Mortgage Questions?

Do you have a question regarding a mortgage program?

Contact Information
Your Question