Paying consistent additional payments on your principal can yield huge savings. Borrowers use different methods to accomplish this goal. For many people,Perhaps the easiest way to organize this process is by making 1 additional mortgage payment per year. But some people won't be able to swing such an enormous extra expense, so dividing an additional payment into twelve additional monthly payments is a fine option too. Finally, you can pay a half payment every other week. These options differ slightly in lowering the total interest paid and shortening payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage extra payments. Keep in mind that virtually all mortgages will permit you to make additional payments to your principal at any time. Any time you get some extra money, consider using this rule to make a one-time additional payment on 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 a few thousand dollars into your mortgage principal will significantly reduce the period of your loan and save a huge amount on interest over the duration of the loan. For most loans, even this small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
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