Making consistent extra payments on your principal balance will provide singificant savings. Borrowers can accomplish this in several ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment a year. However, some folks will not be able to afford such an enormous additional payment, so splitting one extra payment into twelve additional monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every other week. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any time. Any time you get some extra cash, you can use this rule to make an additional one-time payment on your mortgage principal. Here's an example: several years after moving into your home, you receive a very large tax refund,a large inheritance, or a cash gift; , investing several thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on mortgage interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.
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