Paying consistent extra payments on your loan principal will provide huge savings. You can accomplish this in several ways. Paying a single additional full payment one time a year is probably the simplest to track. But some folks can't swing such an enormous extra expense, so splitting a single extra payment into twelve additional monthly payments works as well. Another popular option is to pay a half payment every other week. The effect here is that you will make one additional monthly payment every year. Each option produces slightly different results, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the life of the loan.
Some folks just can't make any extra payments. Remember that virtually all mortgage contracts will allow you to pay extra on your principal at any time. Whenever you come into extra money, consider using this provision to make a one-time additional payment toward your mortgage principal. Here's an example: a few years after buying your home, you receive a larger than expected tax refund,a large legacy, or a non-taxable cash gift; , investing a few thousand dollars into your mortgage principal can shorten the repayment duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. For most loans, even this small amount, paid early enough in the mortgage, could offer big savings in interest and duration of the loan.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.