Paying regular additional payments toward your loan principal will provide singificant returns. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to organize this process is by making one additional payment every year. Of course, some folks can't swing this huge additional expense, so splitting an extra payment into twelve additional monthly payments works too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks just can't make any extra payments. Keep in mind that almost all mortgage contracts will allow you to make additional payments to your principal at any time. You can take advantage of this rule to pay extra on your mortgage principal any time you come into extra money.
If, for example, you were to receive a large gift or tax refund five years into your mortgage, you could pay this windfall toward your mortgage loan principal, which would result in enormous savings and a shortened loan period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can yield huge benefits over the life of the loan.
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