What is an Additional Principal Payment and How Can it Help Me?

Before you read, here are a few terms that might be helpful to your understanding:

* Principal (the amount you borrowed)

* Interest (the cost of borrowing)

Cayetano provides customers with an open contract mortgage. But what does this mean? An open contract mortgage means that you are allowed to make extra payments that go towards your loan WITHOUT penalty. In a traditional mortgage, extra payments can hurt you and your credit score in the long run.

An additional principal payment is any extra money that you choose to apply directly to the balance of your loan. This payment does not go towards interest or any future payments; it goes straight to reducing your principal amount. That means the actual amount of money you borrowed goes down quicker and a reduction of the total dollar amount in interest that you will end up paying.

Overall, if you are looking to pay off your loan sooner than the original time frame, making additional principal payments will be beneficial to you.

Our Servicing Team is always here to help you with any questions that might come up throughout the duration of your loan. Feel free to call or email them at any time!

Servicing Team contact information:

helpdesk@cayetanodevelopment.com

(956)464-4431