Making regular extra payments on your principal will yield big savings. Borrowers can pay against principal by employing various techniques. For many people,Perhaps the easiest way to keep track is to make 1 additional payment every year. But some folks will not be able to pull off such an enormous additional payment, so splitting a single additional payment into 12 extra monthly payments works as well. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some folks can't manage any extra payments. But you should remember that most mortgages allow you to make additional principal payments at any time. Whenever you get some extra cash, consider using this rule to pay an additional one-time payment on your principal. Here's an example: five years after moving into your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, resulting in enormous savings and a shorter payback period. Unless the loan is quite large, even modest amounts applied early in the loan period can yield huge savings over the duration of the loan.
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