Making regular extra payments on your principal can yield big savings. People accomplish this goal in several different ways. For many people,Perhaps the easiest way to keep track is to make one additional mortgage payment every year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Another option is to pay half of your payment every two weeks. The effect here is that you make one extra monthly payment in a year. Each of these options yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay extra every month or even every year. Remember that almost all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you get some extra cash, you can use this rule to make a one-time additional payment toward your mortgage principal. Here's an example: several years after buying your home, you receive a larger than expected tax refund,a very large legacy, or a cash gift; , you could pay a portion of this money toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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