Making regular additional payments toward your loan principal provides enormous savings. Borrowers pay extra on principal in many different ways. Paying 1 additional full payment once a year is likely the easiest to keep track of. If you can't afford to pay an additional whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every two weeks. Each of these options yields slightly different results, but they will all significantly shorten the duration of your mortgage and lower the total interest paid over the life of the loan.
Some people can't manage extra payments. But you should remember that most mortgages will allow you to make additional payments at any time. You can benefit from this rule to pay down your mortgage principal when you get some extra money. Here's an example: five years after buying your home, you receive a very large tax refund,a large inheritance, or a cash gift; , you could pay this windfall toward your loan principal, which would result in huge savings and a shorter loan period. For most loans, even a relatively small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
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