While not every borrower can http://rksloans.com/title-loans-ky/ schedule extra payments with standard frequency, extra payments can come from other sources. Consumers without a regular source of additional funds have other options for taking advantage of mortgage cycling, such as using tax refunds or cutting back on luxuries.
Bi-weekly Payments
Bi-weekly payments are another popular way to pay extra on a mortgage. Given that there are 12 months and 52 weeks in a year, paying 26 bi-weekly payments is like paying 13 monthly payments, with the 13th payment going entirely toward the principal of the loan.
Finding the Extra Funds
Many homeowners do not consider making additional payments because they believe their budgets will not provide for extra funds. Yet, these same individuals may use credit cards to purchase big-ticket items such as televisions or the latest smart phone. They may not stop to calculate the monthly expense of a morning latte and scone. $6.00 spent every day on the way to work totals $120 monthly. A thorough analysis of the monthly budget can reveal many ways to save money that may be applied to the mortgage. Continue reading “Even bi-annual payments of significant size can reduce the term of the loan and the total interest paid”