Extra Payments Yield Big Savings

Making consistent extra payments toward your loan principal will yield singificant savings. People employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment a year. But many folks won't be able to afford such an enormous additional expense, so splitting a single extra payment into 12 additional monthly payments is a fine option too. Finally, you can pay a half payment every other week. Each option produces slightly different results, but each will significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.

Additional One-time payment

It may not be possible for you to pay down your principal every month or even every year. But you should remember that most mortgages allow additional payments at any time. Any time you come into extra cash, you can use this provision to pay a one-time additional payment on your mortgage principal.

If, for example, you receive a surprise windfall four years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in enormous savings and a shorter loan period. Unless the loan is quite large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.

Northeast Bancorp of America, Inc. can walk you through the pitfalls of getting a mortgage. Give us a call at (440) 234-9660.

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