Paying regular extra payments toward your loan principal will yield huge savings. Borrowers can do this in several ways. For many people,Perhaps the simplest way to keep track is by making one extra mortgage payment every year. Of course, many people won't be able to pull off this huge additional payment, so dividing a single extra payment into twelve extra monthly payments works too. Finally, you can commit to paying half of your mortgage payment every other week. These options differ slightly in reducing the final payback amount 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.
Some people just can't make any extra payments. Keep in mind that most mortgage contracts will permit you to pay extra on your principal at any time. You can benefit from this provision to pay down your principal any time you come into extra money. For example: five years after buying your home, you receive a huge tax refund,a large legacy, or a non-taxable cash gift; , you could pay this windfall toward your mortgage loan principal, which would result in significant savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early can yield huge savings over the duration of the loan.
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