Paying regular additional payments toward your loan principal yields huge returns. Borrowers make this happen in several different ways. For many people,Perhaps the simplest way to keep track is by making one extra payment every year. But some folks will not be able to afford this huge extra payment, so splitting one additional payment into twelve additional monthly payments works as well. Finally, you can commit to paying half of your mortgage payment every two weeks. These options differ a little in lowering the total interest paid and reducing payback length, but each will significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers can't manage any extra payments. But it's important to note that most mortgages will allow additional principal payments at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money. For example: five years after buying your home, you get a very large tax refund,a large inheritance, or a cash gift; , paying a few thousand dollars into your mortgage principal can reduce the repayment period of your loan and save enormously on interest over the duration of the loan. For most loans, even this relatively small amount, paid early in the loan period, could offer huge savings in interest and duration of the loan.
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