Making consistent extra payments toward your loan principal can yield huge returns. People employ various techniques to meet this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment every year. However, some folks will not be able to swing such an enormous extra payment, so splitting a single extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay a half payment every other week. These options differ slightly in lowering the total interest paid and reducing payback length, but each will significantly shorten the length of your mortgage and lower the total interest you will pay over the life of the loan.
It may not be possible for you to pay down your principal every month or even every year. Keep in mind that virtually all mortgages will permit you to pay extra on your principal at any time. You can benefit from this rule to pay down your mortgage principal any time you come into extra money.
For example: a few years after moving into your home, you receive a huge tax refund,a very large legacy, or a cash gift; , investing a few thousand dollars into your mortgage principal can reduce the duration of your loan and save a huge amount on interest over the duration of the loan. Unless the mortgage loan is very large, even a few thousand dollars applied early can yield huge benefits over the duration of the loan.
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