Making consistent additional payments on the loan principal provides singificant returns. Borrowers can accomplish this in various ways. For many people,Perhaps the easiest way to organize this process is to make one additional payment per year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another popular option is to pay a half payment every other week. The result is you make one extra monthly payment each year. Each of these options yields slightly different results, but each will significantly reduce the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay down your principal every month or even every year. Remember that most mortgages will allow you to make additional payments to your principal at any time. You can benefit from this rule to pay extra on your mortgage principal any time you come into extra money. Here's an example: several years after buying your home, you receive a very large tax refund,a large legacy, or a cash gift; , investing a few thousand dollars into your home's principal can reduce the repayment duration of your loan and save a huge amount on interest over the duration of the mortgage loan. Unless the mortgage loan is quite large, even small amounts applied early in the loan period can yield huge savings over the duration of the loan.
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