Making regular extra payments on your loan principal will yield enormous savings. Borrowers accomplish this goal in a few ways. Making a single extra payment one time per year may be the easiest to track. If you can't pay an additional whole payment in one month, you can divide that payment by 12 and pay that additional amount monthly. Another very popular option is to pay half of your payment every two weeks. The result is you make one extra monthly payment every year. Each of these options yields different results, 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 down your principal every month or even every year. But remember that most mortgage contracts will allow additional principal payments at any time. You can benefit from this rule to pay extra on your principal when you get some extra money.
For example: five years after moving into your home, you get a larger than expected tax refund,a large legacy, or a cash gift; , you could pay this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. Unless the loan is very large, even small amounts applied early in the loan period can yield huge savings over the duration of the loan.
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