Paying consistent extra payments on your principal yields big savings. You can accomplish this using a few different techniques. Paying 1 extra full payment one time a year is perhaps the easiest to arrange. However, many people can't afford such an enormous additional payment, so splitting a single extra payment into twelve extra monthly payments is a fine option too. Another popular option is to pay a half payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in lowering the total interest paid and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some people can't manage extra payments. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any time. You can benefit from this provision to pay down your mortgage principal when you get some extra money. For example: several years after moving into your home, you get a very large tax refund,a very large inheritance, or a cash gift; , investing a few thousand dollars into your mortgage principal will reduce the repayment duration of your loan and save a huge amount on interest over the duration of the loan. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and in the length of the loan.
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