Paying consistent additional payments toward your loan principal will yield enormous savings. You can accomplish this in several ways. Paying a single additional payment once a year may be the simplest to arrange. But some folks will not be able to afford such a large additional expense, so dividing one extra payment into 12 extra monthly payments is a fine option too. Finally, you can commit to paying a half payment every two weeks. These options differ slightly in lowering the final payback amount and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can benefit from this provision to pay down your mortgage principal any time you come into extra money.
For example: five years after buying your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your home's principal will shorten the repayment duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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