Making consistent extra payments toward the principal balance provides huge returns. Borrowers make this happen in several ways. For many people,Perhaps the easiest way to keep track is to make 1 additional mortgage payment every year. If you can't afford to pay an additional whole payment all at once, you can divide your payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every other week. Each option yields different results, but they will all significantly shorten the duration of your mortgage and lower your total interest paid.
Some borrowers just can't make extra payments. Keep in mind that virtually all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. You can take advantage of this rule to pay extra on your principal any time you get some extra money.
Here's an example: several years after moving into your home, you receive a huge tax refund,a large legacy, or a cash gift; , you could apply a portion of this money toward your mortgage loan principal, resulting in enormous savings and a shorter loan period. Unless the mortgage loan is very large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
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