Paying regular additional payments toward your loan principal will provide huge savings. Borrowers can pay extra on principal in various ways. For many people,Perhaps the easiest way to organize this process is to make 1 additional mortgage payment every year. If you can't pay an extra whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay a half payment every other week. The effect here is that you make one extra monthly payment each year. Each of these options yields slightly different results, but they will all significantly reduce the length of your mortgage and lower the total interest paid over the duration of the loan.
Some folks just can't make any extra payments. Keep in mind that virtually all mortgages will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected cash, you can use this provision to pay a one-time additional payment toward mortgage principal.
Here's an example: several years after buying your home, you receive a huge tax refund,a very large inheritance, or a non-taxable cash gift; , paying several thousand dollars into your mortgage principal can reduce the period of your loan and save enormously on interest over the duration of the loan. Unless the loan is very large, even modest amounts applied early in the loan period can produce huge benefits over the duration of the loan.
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