Big Interest Savings: Available to Anyone with a Mortgage

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Making regular additional payments toward the principal can yield significant savings. Borrowers pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make one extra payment a year. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every two weeks. These options differ a little in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.

Additional One-time payment

It may not be possible for you to pay extra every month or even every year. Remember that virtually all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected cash, you can use this provision to make a one-time additional payment toward your principal. Here's an example: several years after moving into your home, you receive a very large tax refund,a large legacy, or a non-taxable cash gift; , investing several thousand dollars into your home's principal will shorten the period of your loan and save enormously on interest over the duration of the loan. Unless the mortgage loan is quite large, even modest amounts applied early can yield huge savings over the life of the loan.

First National Bank can walk you First National Bank can answer questions about these interest savings and many others. Call us: (575)437-4880.