Making consistent additional payments toward your loan principal provides enormous returns. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the easiest way to keep track is by making one additional mortgage payment per year. But some folks will not be able to pull off this huge additional expense, so splitting a single additional payment into twelve additional monthly payments works as well. Finally, you can commit to paying a half payment every two weeks. These options differ a little in lowering the total interest paid and shortening payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay extra every month or even every year. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can benefit from this rule to pay extra on your principal any time you get some extra money. Here's an example: five years after buying your home, you receive a very large tax refund,a large legacy, or a cash gift; , paying a few thousand dollars into your home's principal will shorten the repayment period of your loan and save a huge amount on mortgage interest over the life of the mortgage loan. Unless the loan is very large, even modest amounts applied early can produce huge savings over the life of the loan.
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