Making consistent additional payments toward the principal balance yields huge savings. Borrowers pay extra in a few different ways. Making one extra payment once every year is likely the simplest to arrange. If you can't afford to pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.
Some borrowers just can't make extra payments. Remember that virtually all mortgage contracts will permit you to make additional payments to your principal at any time. You can benefit from this provision to pay extra on your mortgage principal when you come into extra money.
For example: several years after buying your home, you get a larger than expected tax refund,a large inheritance, or a cash gift; , investing a few thousand dollars into your mortgage principal can significantly reduce the repayment duration of your loan and save a huge amount on interest over the life of the loan. Unless the loan is very large, even modest amounts applied early in the loan period can yield huge savings over the life of the loan.
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