Making regular additional payments on the loan principal provides huge savings. Borrowers pay extra in several ways. For many people,Perhaps the easiest way to organize this process is by making one extra payment every year. But some folks won't be able to afford such an enormous extra expense, so dividing a single additional payment into 12 additional monthly payments works as well. Finally, you can pay a half payment every two weeks. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgage contracts will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay down your principal when you get some extra money. Here's an example: several years after moving into your home, you receive a huge tax refund,a very large inheritance, or a cash gift; , investing several thousand dollars into your home's principal will reduce the period of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even a modest amount, paid early enough in the loan period, could offer big savings in interest and in the duration of the loan.
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