Paying consistent additional payments on your loan principal provides enormous returns. People use different methods to meet this goal. For many people,Perhaps the easiest way to keep track is by making one extra mortgage payment per year. But many people can't swing such an enormous extra payment, so dividing a single additional payment into twelve additional monthly payments is a great option too. Finally, you can pay half of your mortgage payment every other week. Each option produces different results, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
Some borrowers just can't make any extra payments. But remember that most mortgages allow you to make additional principal payments at any time. You can take advantage of this provision to pay extra on your mortgage principal when you come into extra money.
If, for example, you receive a very large gift or tax refund just a few years into your mortgage, you could pay a portion of this money toward your loan principal, which would result in huge savings and a shorter loan period. For most loans, even a modest amount, paid early in the loan period, could offer big savings in interest and in the duration of the loan.
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