Save on Your Mortgage

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Paying regular additional payments toward your principal balance provides huge returns. Borrowers accomplish this goal in a few different ways. Making one extra full payment once per year may be the simplest to arrange. If you can't 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. Another option is to pay a half payment every two weeks. The effect here is that you make one additional monthly payment each year. Each of these options yields different results, but each will significantly shorten 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 permit you to pay extra on your principal at any point during repayment. Any time you get some unexpected cash, consider using this rule to pay a one-time additional payment toward your mortgage principal. If, for example, you receive a large gift or tax refund five years into your mortgage, paying several thousand dollars into your home's principal will reduce the duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even a relatively small amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.

San Diego Financial can walk you the mortgage process. Call us at 760-415-2345.