Paying regular extra payments toward the principal will provide huge returns. Borrowers can do this using a few different techniques. Paying a single additional payment one time a year is perhaps the simplest to track. However, some folks can't afford this huge additional payment, so splitting an extra payment into twelve additional monthly payments works as well. Another option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment in a year. Each option yields slightly different results, but they will all significantly shorten the length of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. But you should remember that most mortgages will allow you to make additional principal payments at any time. You can take advantage of this provision to pay extra on your principal any time you come into extra money. If, for example, you receive a very large gift or tax refund four years into your mortgage, you could pay a portion of this windfall toward your loan principal, resulting in enormous savings and a shortened loan period. Unless the mortgage loan is quite large, even modest amounts applied early can yield huge savings over the life of the loan.
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