Making regular additional payments on the principal balance will provide huge returns. Borrowers employ various techniques to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one extra mortgage payment every year. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly reduce the duration of your mortgage and lower the total interest paid over the life of the loan.
Some people can't manage extra payments. But it's important to note that most mortgages will allow you to make additional principal payments at any time. You can benefit from this provision to pay extra on your principal when you come into extra money.
If, for example, you were to receive a large gift or tax refund three years into your mortgage, you could apply this windfall toward your loan principal, resulting in enormous savings and a shorter payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
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