Paying consistent extra payments on your loan principal can yield enormous savings. Borrowers can pay extra on principal by employing various techniques. For many people,Perhaps the simplest way to keep track is by making 1 additional payment every year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay a half payment every other week. The result is you make one extra monthly payment every year. Each option produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some people can't manage any extra payments. But remember that most mortgages allow additional payments at any time. You can benefit from this provision to pay extra on your mortgage principal when you come into extra money. Here's an example: a few years after buying your home, you receive a huge tax refund,a large legacy, or a cash gift; , investing a few thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can produce huge benefits over the duration of the loan.
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