Making regular extra payments on your loan principal will yield huge returns. Borrowers pay against principal in various ways. For many people,Perhaps the easiest way to keep track is to make one extra payment per year. If you can't pay an extra whole payment all at once, you can divide that payment by 12 and write a check for that additional amount monthly. Finally, you can commit to paying a half payment every other week. These options differ slightly in reducing the final payback amount and shortening 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.
Some folks can't manage any extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. Any time you come into extra cash, you can use this provision to make a one-time additional payment toward your principal.
For example: a few years after moving into your home, you receive a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay a portion of this windfall toward your mortgage loan principal, which would result in huge savings and a shorter loan period. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and in the duration of the loan.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.