Making regular extra payments on the loan principal will provide huge returns. Borrowers pay against principal in many different ways. For many people,Perhaps the simplest way to organize this process is by making 1 extra mortgage payment every year. Of course, many people can't afford such a large additional payment, so splitting an additional payment into twelve additional monthly payments works as well. Finally, you can pay half of your mortgage payment every two weeks. These options differ slightly in reducing the final payback amount and reducing payback length, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some people can't manage any extra payments. Remember that most mortgage contracts will allow you to make additional payments to your principal at any point during repayment. You can benefit from this rule to pay down your principal any time you get some extra money.
Here's an example: a few years after moving into your home, you get a very large tax refund,a large legacy, or a cash gift; , you could apply a portion of this windfall toward your loan principal, which would result in significant savings and a shortened payback period. Unless the mortgage loan is very large, even a few thousand dollars applied early in the loan period can yield huge savings over the duration of the loan.
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