Paying consistent extra payments on the loan principal can yield huge returns. Borrowers can accomplish this in various ways. Paying 1 additional payment one time per year may be the simplest to track. If you can't afford to pay an additional whole payment all at once, you can divide that 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 additional monthly payment in a year. These options differ a little in reducing the total interest paid and shortening payback length, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some folks just can't make any extra payments. Keep in mind that virtually all mortgages will permit you to pay extra on your principal at any time. Whenever you come into extra money, consider using this provision to make a one-time additional payment on your mortgage principal. For example: several years after buying your home, you get a huge tax refund,a large inheritance, or a cash gift; , you could pay a portion of this windfall toward your loan principal, resulting in significant savings and a shorter loan period. For most loans, even a relatively modest amount, paid early in the mortgage, could offer huge savings in interest and length of the loan.
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