Paying consistent extra payments on your loan principal will provide huge savings. People make this happen in several ways. Paying one additional payment one time per year may be the simplest to track. Of course, some folks can't afford such a large additional expense, so splitting a single extra payment into 12 extra monthly payments works too. Another option is to pay half of your payment every other week. The effect here is that you make one extra monthly payment in a year. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.
It may not be possible for you to pay more every month or even every year. Remember that virtually all mortgage contracts will permit you to make additional payments to your principal at any time. You can take advantage of this provision to pay down your principal any time you come into extra money. For example: several years after buying your home, you receive a larger than expected tax refund,a large inheritance, or a non-taxable cash gift; , you could pay this windfall toward your loan principal, resulting in enormous savings and a shorter loan period. For most loans, even this relatively small amount, paid early in the loan period, could offer big savings in interest and in the length of the loan.
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