Making regular additional payments on your loan principal can yield big returns. Borrowers employ various techniques to accomplish this goal. For many people,Perhaps the simplest way to keep track is by making 1 additional payment every year. If you can't afford to pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Another popular option is to pay half of your payment every other week. The result is you will make one extra monthly payment every year. These options differ a little in reducing the total interest paid and shortening payback length, but each will significantly shorten the length of your mortgage and lower the total interest paid over the duration of the loan.
It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgage contracts will permit you to pay extra on your principal at any time. You can take advantage of this provision to pay extra on your principal any time you get some extra money. If, for example, you were to receive a very large gift or tax refund five years into your mortgage, investing a few thousand dollars into your home's principal will shorten the period of your loan and save enormously on mortgage interest paid over the duration of the loan. Unless the loan is quite large, even a few thousand dollars applied early can yield huge savings over the life of the loan.
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