Making consistent additional payments on the principal balance will provide enormous savings. Borrowers use different methods to meet this goal. Making one additional payment one time a year may be the easiest to track. If you can't afford to pay an additional whole payment in one month, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that most mortgage contracts will permit you to pay extra on your principal at any point during repayment. Whenever you get some extra cash, you can use this provision to make an additional one-time payment on your mortgage principal. Here's an example: a few years after moving into your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , you could apply this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. Unless the loan is quite large, even modest amounts applied early can produce huge benefits over the life of the loan.
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