Making consistent additional payments on your principal can yield enormous returns. You can accomplish this in several ways. For many people,Perhaps the simplest way to organize this process is by making 1 additional mortgage payment every year. If you can't pay an additional whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. Each option produces slightly different results, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
Some people can't manage any extra payments. Keep in mind that virtually all mortgage contracts will allow you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your mortgage principal any time you come into extra money. For example: a few years after moving into your home, you get a very large tax refund,a large inheritance, or a non-taxable cash gift; , you could apply this windfall toward your loan principal, resulting in significant savings and a shorter loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge savings over the life of the loan.
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