Extra Payments Provide Huge Mortgage Savings
There's a trick to reduce the repayment period of your mortgage and save you thousands of dollars over the course of your loan: Make additional payments that apply to your loan principal. Borrowers can do this using a few different techniques. For many people,Perhaps the easiest way to organize this process is to make one additional payment every year. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. 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 your total interest paid.
Lump Sum Extra Payment
Some people just can't make any extra payments. But it's important to note that most mortgage contracts allow additional payments at any time. You can benefit from this provision to pay extra on your principal any time you get some extra money. For example: a few years after moving into your home, you get a larger than expected tax refund,a very large inheritance, or a cash gift; , you could apply this money toward your mortgage loan principal, which would result in enormous savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the duration of the loan.