Paying regular additional payments on the principal balance will provide singificant returns. People accomplish this goal in several ways. For many people,Perhaps the simplest way to keep track is to make one additional payment every year. However, many folks will not be able to pull off such a large additional expense, so dividing one extra payment into 12 extra monthly payments is a great option too. Another very popular option is to pay half of your payment every other week. The effect here is that you make one additional monthly payment in a year. These options differ a little in lowering the total interest paid and shortening payback length, but each will significantly shorten the duration of your mortgage and lower your total interest paid.
It may not be possible for you to pay more every month or even every year. Remember that most mortgages will permit you to pay extra on your principal at any point during repayment. You can benefit from this provision to pay extra on your mortgage principal any time you get some extra money. For example: a few years after moving into your home, you get a huge tax refund,a very large legacy, or a non-taxable cash gift; , investing several thousand dollars into your mortgage principal will shorten the period of your loan and save enormously on mortgage interest paid over the life of the mortgage loan. Unless the mortgage loan is very large, even modest amounts applied early can yield huge savings over the life of the loan.
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