Making regular extra payments on the loan principal can yield enormous savings. You can accomplish this in various ways. For many people,Perhaps the easiest way to keep track is by making 1 additional mortgage payment per year. But many folks will not be able to pull off this huge extra expense, so dividing a single extra payment into twelve extra monthly payments is a great option too. Finally, you can pay half of your mortgage payment every two weeks. Each option produces slightly different results, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the duration of the loan.
Some people just can't make any extra payments. Remember that almost all mortgages will allow you to make additional payments to your principal at any time. You can benefit from this provision to pay down your principal any time you get some extra money. If, for example, you receive a large gift or tax refund five years into your mortgage, you could pay a portion of this money toward your mortgage loan principal, which would result in huge savings and a shortened payback period. For most loans, even this small amount, paid early enough in the mortgage, could offer huge savings in interest and duration of the loan.
Are you looking to buy a house? Let us help you. Just fill out as much of the information below that you want and we'll get right back to you, with no obligation to you. We guarantee your privacy.