Making regular additional payments toward the principal balance will yield singificant returns. People use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is to make one extra mortgage payment per year. Of course, some people will not be able to afford such an enormous extra expense, so splitting an additional payment into twelve additional monthly payments works as well. Finally, you can pay a half payment every two weeks. Each of these options yields slightly different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make extra payments. Keep in mind that most mortgages will permit you to make additional payments to your principal at any time. You can benefit from this rule to pay down your principal any time you get some extra money.
Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a very large inheritance, or a cash gift; , you could pay this windfall toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. For most loans, even this modest amount, paid early enough in the mortgage, could offer huge savings in interest and in the length of the loan.
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