Paying regular additional payments toward the loan principal will yield enormous savings. Borrowers make this happen in a few ways. Making a single extra full payment one time per year is perhaps the easiest to keep track of. If you can't pay an extra whole payment in one month, you can split that large amount into 12 smaller payments and pay that additional amount monthly. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower your total interest paid.
Some folks just can't make any extra payments. Remember that almost all mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected money, you can use this rule to make a one-time additional payment toward your principal.
For example: several years after moving into your home, you get a very large tax refund,a large legacy, or a non-taxable cash gift; , you could pay a portion of this windfall toward your loan principal, which would result in huge savings and a shorter loan period. Unless the loan is quite large, even a few thousand dollars applied early can produce huge savings over the life of the loan.
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