Extra Payments Provide Big Savings

Making consistent additional payments toward the principal balance can yield singificant savings. Borrowers use different methods to accomplish this goal. Making 1 additional full payment once every year is perhaps the easiest to arrange. If you can't pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.

Additional One-time payment

Some folks can't manage any extra payments. But remember that most mortgage contracts allow additional principal payments at any time. Any time you come into unexpected cash, consider using this rule to pay a one-time additional payment on principal. If, for example, you receive a large gift or tax refund just a few years into your mortgage, paying a few thousand dollars into your mortgage principal will shorten the repayment period of your loan and save a huge amount on mortgage interest over the duration of the mortgage loan. Unless the mortgage loan is very large, even small amounts applied early in the loan period can produce huge savings over the duration of the loan.

Reliance Mortgage Service, Inc can walk you Reliance Mortgage Service, Inc has your mortgage answers. Give us a call at 562 320-0510.

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