Making consistent extra payments toward your loan principal will yield big savings. People accomplish this goal in a few ways. Paying a single additional full payment one time every year is likely the simplest to arrange. But some people can't afford such an enormous additional payment, so dividing one additional payment into twelve extra monthly payments works as well. Another very popular option is to pay half of your payment every other week. The effect here is that you will make one extra monthly payment every year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. But it's important to note that most mortgages allow additional principal payments at any time. Whenever you come into extra money, consider using this provision to pay a one-time additional payment on mortgage principal.
For example: several years after buying your home, you receive a very large tax refund,a very large inheritance, or a non-taxable cash gift; , you could pay a portion of this windfall toward your loan principal, which would result in significant savings and a shorter payback period. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can produce huge benefits over the life of the loan.
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