Mortgage Saving Tips
Paying consistent additional payments on your principal provides singificant savings. Borrowers accomplish this goal in several ways. Making 1 additional payment once a year may be the simplest to keep track of. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another option is to pay half of your payment every other week. The result is you make one additional monthly payment each year. These options differ a little in lowering the final payback amount and reducing payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
One-time Additional Payment
Some people can't manage any extra payments. Keep in mind that most mortgage contracts will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay down 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 large legacy, or a cash gift; , investing several thousand dollars into your home's principal can shorten the repayment period of your loan and save a huge amount on interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can produce huge benefits over the life of the loan.