Making regular additional payments on the principal balance provides singificant savings. Borrowers can do this in various ways. For many people,Perhaps the simplest way to organize this process is by making one additional payment every year. However, many people won't be able to afford this huge additional expense, so splitting an extra payment into 12 extra monthly payments works too. Another popular option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment every year. Each option yields different results, but they will all significantly reduce the length of your mortgage and lower the total interest you will pay over the life of the loan.
Some people can't manage extra payments. But remember that most mortgages will allow you to make additional principal payments at any time. Whenever you get some extra cash, you can use this rule to make a one-time additional payment toward your mortgage principal. Here's an example: several years after moving into your home, you get a very large tax refund,a very large legacy, or a non-taxable cash gift; , you could pay this money toward your loan principal, resulting in huge savings and a shortened loan period. Unless the mortgage loan is quite large, even modest amounts applied early can produce huge benefits over the duration of the loan.
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