Paying regular extra payments on the loan principal yields huge returns. Borrowers can accomplish this using a few different techniques. Making one additional full payment one time a year is likely the easiest to keep track of. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Finally, you can commit to paying half of your mortgage payment every two weeks. Each option yields different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people can't manage extra payments. Keep in mind that virtually all mortgage contracts will permit you to pay extra on your principal at any point during repayment. You can take advantage of this rule to pay extra on your mortgage principal any time you come into extra money. For example: a few years after moving into your home, you receive a huge tax refund,a very large inheritance, or a non-taxable cash gift; , you could apply a portion of this windfall toward your loan principal, resulting in huge savings and a shortened loan period. Unless the loan is very large, even a few thousand dollars applied early can produce huge benefits over the life of the loan.
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