Making consistent additional payments on the principal balance will provide singificant returns. You can do this in various ways. For many people,Perhaps the simplest way to organize this process is to make 1 extra payment a year. However, many people will not be able to swing such an enormous additional payment, so splitting one extra payment into twelve extra monthly payments works too. Another very popular option is to pay half of your payment every two weeks. The result is you make one additional monthly payment each year. Each of these options produces slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
Some borrowers can't manage any extra payments. But you should remember that most mortgage contracts will allow additional payments at any time. You can take advantage of this rule to pay extra on your principal when you come into extra money.
Here's an example: a few years after moving into your home, you get a very large tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your mortgage principal will shorten the repayment duration of your loan and save a huge amount on interest paid over the duration of the mortgage loan. For most loans, even a small amount, paid early in the mortgage, could offer huge savings in interest and in the length of the loan.
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