Paying regular additional payments toward the loan principal will yield singificant savings. Borrowers can accomplish this using a few different techniques. For many people,Perhaps the easiest way to organize this process is to make 1 extra mortgage payment per year. However, many people can't pull off such a large extra payment, so dividing a single extra payment into twelve extra monthly payments is a great option too. Another popular option is to pay a half payment every other week. The effect here is that you make one additional monthly payment every year. These options differ a little in lowering the total interest paid and reducing payback length, but they will all significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks can't manage extra payments. But it's important to note that most mortgage contracts allow additional payments at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money. For example: a few years after buying your home, you receive a huge tax refund,a very large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal will shorten the period of your loan and save a huge amount on mortgage interest paid over the life of the mortgage loan. For most loans, even a relatively small amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
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