Additional Payments Provide Big Savings

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Paying consistent additional payments on your loan principal provides big savings. Borrowers can accomplish this using a few different techniques. Paying a single additional payment once a year is probably the easiest to keep track of. But many people won't be able to pull off such an enormous additional expense, so dividing an extra payment into 12 additional monthly payments is a fine option too. Another popular option is to pay a half payment every two weeks. The result is you will make one extra monthly payment each year. Each option produces slightly different results, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

Lump-sum Additional Payment

It may not be possible for you to pay down your principal every month or even every year. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal when you come into extra money. If, for example, you receive a surprise windfall three years into your mortgage, paying several thousand dollars into your mortgage principal can significantly shorten the repayment period of your loan and save a huge amount on mortgage interest paid over the life of the loan. Unless the mortgage 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.

Fairway Independent Mortgage Corp can get you past the pitfalls of getting a mortgage. Give us a call: (662) 429-5100 .

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